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The way you define the scope of your work has everything to do with how your clients see your value.
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Agent vs. Consultant

Most of us have some sort of hobby – fishing, woodworking, knitting, or recreational substances – that we use to entertain ourselves when we’re not working. I have tennis and scuba. But it’s winter in Cincinnati, and there’s a global pandemic raging, so I haven’t gotten to enjoy either for a while. (I know, I know, you can play tennis indoors . . . . )

So one of my hobbies is a different business – I’m on the advisory board of a startup digital marketing firm that helps clients maximize their results from search engine and social media marketing. It’s a fascinating, fast-changing field, and the perspective I’ve gained there has helped me do a better job telling TMN’s story.

Retailers looking to increase online sales, especially in a time of pandemic when e-commerce has replaced brick-and-mortar retail sales, typically have two places to go for online marketing help: agencies or consultants.

Do you want to do your own big-picture, top-down strategizing? Agencies implement those solutions for you. Typically, agencies are well-siloed – they report to the client’s CMO and don’t stray outside that specific relationship.

Are you unsure what your strategy should be? Consultants come up with those answers for you. They typically look at the bigger picture and work across the C-suite. Consultants also typically have more data to help clients make decisions and then implement those decisions.

You’re not offering clients help with digital marketing. But the divide that I’m discussing here can help you understand the role you play for clients – and build a foundation for offering them a bigger, more valuable, and more lucrative role.

In short, when clients come to you with a stack of W-2s, 1098s, 1099s, and charitable receipts, you’re acting as an agent. They know what the problem is – they have a pile of papers, and they need to turn that pile into a finished tax return. Easy peasy, right?

But when clients come to you with more complicated problems, you’ve got the chance to go above and beyond turning their pile of papers into a 1040. You can help them define problems, like what business entities to choose, and how to make more of their healthcare expenses deductible, and how to use tax breaks to help pay for their kids private school tuition or pricey travel sports leagues. In short, you get to play consultant.

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Why You Should Be a Consultant

Consulting is more valuable work, and it pays better, too. That’s been the entire premise behind TMN since we launched 16 years ago. Today’s technology is making the “agency” work of our business less valuable, and more commoditized. That adds urgency to our fundamental premise.

What happens when clients come to you for agency work – like, say, between now and April 15 – and you discover you can be more valuable as a consultant? Do you have to wait for them to ask you to play a different role? Of course not! The agency vs. consultant distinction – in this case, the tax preparer vs. tax consultant distinction – can help you move from the more-limited role to the more-valuable role.

The same thing applies for those of you looking to leverage your business through financial services. In each case, the client has come to you for one thing, and you’ve discovered you can offer them something even more valuable. Why would you not jump on that chance, especially when Intuit is spending literally hundreds of millions of dollars trying to convince your agency clients that they don’t need you?

Think of the whole thing as one of those Eddie Murphy movies, where you look close and discover it’s Eddie playing every single character in a barbershop scene. You may think it’s silly, but those movies sell millions of tickets. And while you won’t see Eddie picking up Golden Globe awards for them, audiences love them.

H&R Block is an agency.

Jackson Hewitt is an agency.

Liberty Tax is an agency.

You’re better than that. Position yourself as a consultant and you won’t have to care how Block, Jackson Hewitt, or Liberty play the game, because you’ll already be way out of their league.

Content Update

Book licensees, the “10 Most Expensive Tax Mistakes” books have been updated for 2021. Please submit a support ticket if you need a copy.

The Real Estate Investor seminar kit has been updated for 2021: Portal > “Start Here” > “Step 1: Diagnose” > “3. Prospecting Seminars”

The Capital Gains Planning Grid has been added: Portal > “Start Here” > “Step 1: Diagnose” > “2. How to Diagnose a Tax Return”

We’re also working to create a place to post the TMN Book Club recordings, starting with last month’s selection, The Psychology of Money by Morgan Housel. Buy a copy for yourself and read it. Then buy 10 more copies, give 7 to your best clients, and 3 to your hottest prospects. It’s that good.

The Briefs is a weekly column on marketing and business planning for tax professionals and financial advisors looking to better serve clients and grow their business. 

Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.
Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.

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