Complacent: Showing uncritical satisfaction with oneself or one’s achievements.
Okay, this one is self-serving in a way. I feel like I could take this blog in many different directions as today I get to be the author, the consultant, and the producer. So, I guess this better come out well or I look bad on numerous fronts!
Starting Maverick Ag with Kristjan Hebert, my assumption was that I was going to fill a financial and accounting need in the industry. As Internal CFO (Chief Financial Officer, ), I provide not only high-level numbers analysis, but also dig deeper than most into the “why”. I am not afraid to say, this might have been the most wrong I have ever been. Today, I spend more of my time having conversations on operations and business, than I do reviewing or presenting numbers. The industry changed overnight, and it took me a while to catch-up.
It is a bold statement, but I believe a large percentage of the agriculture advisors in the industry are “out of touch”. It used to be that tax, or financial statements for lenders, or business proposals were the most important advice a farm could receive. Now, those are everyday industry tools, and the real importance falls on operations. When a farm has annual costs in the ground of $5M or more, I can tell you that tax or compliance work does not drive the bus. In fact, they might not even have a seat at this point.
Now, before the accountants reading start tweeting at me, this is not meant as an attack. Think of it more as a lesson I had to learn after leaving public accounting that would have helped me out in my previous roles. The ability to deal with operations and provide internal advice on farms, will outlive the accounting and finance world. Let me explain:
- Compliance – Banks will always require financial statements for lending, my question is whether technology can replace the everyday accountant? In dealing with today’s technology around bookkeeping, payroll, invoice collecting, accuracy auditing, as well as financial statement preparation, I believe the answer is not if, but when. I no longer need to go to the bank to deposit or send money, so is it a stretch that I don’t need to see an accountant to provide up to date financial information that is accurate? I think compliance work for accountants will be one of the first dominoes to fall.
- Tax – Don’t get me wrong, there will always be a need for tax specialists. Removing the small business limit and going with an average rate for small and large business would cut down on this need, but it would still exist. However, filing your personal and corporate tax returns I believe will be gone for accountants as well. Already, most accounting programs in public firms download the slips directly from CRA and then refile. The only real entry for accountants on most returns would be nominal deductions for medical and other one-offs. I believe that these will one day become automated upload as well and poof, no T1 or T2 prep work for accountants.
- Finance – Corporate finance and valuations will always be a required specialty, but I already see most on the investment side using Questrade or other apps to handle this type of transaction themselves. How long before these apps can do everything, and more than most current advisors are capable of? Not to mention, docusign and other technologies have already made the need for in-person meetings irrelevant for most. This part of the industry has already started the collapse as many farms are hedging and trading without assistance.
So, let’s circle back. As I said at the beginning, without being able to consult on operations and the business of agriculture, I believe advisors will get left behind. In fact, I am already seeing it with many of the clients we consult with. Some have advisors that are great, and we work as a team together to provide what is best for the client in all aspects. Some are more ego driven and tend to butt heads as they believe we are moving in on their territory. I feel bad for the farms, as they should be getting the best from their entire team.
What does the industry need to do? Educate, educate, educate.
I still attend numerous learning sessions per year at Strategic Coach, as well as some of the top agriculture advisors out of the US and Canada. We work closely with our advisory team to make sure that we are ahead of the producers, not behind.
So, to conclude on my true assessment of how to become a great advisor, another one liner I heard and had to share – “failure is not an option, it is a requirement”.
One more thing to add, “If your advisor is too important and too busy to pick up the phone when you call, find another advisor”. That ends my two cents and frustration with the industry for today.