The right farm advisor can help a business improve efficiencies, optimize performance and grow revenue. They also provide support to overcome challenges, but despite these benefits, the number of farmers using advisors has declined from 32 per cent in 2015 to 23 per cent in 2020, according to Farm Management Canada’s Dollars and Sense Study.
These numbers tell their own story. We can assume that a portion of farmers working with advisors are not getting the most out of their relationship and would benefit from changing advisors — but a transition is not without challenges.
“It’s a hard thing because you’ve built up this relationship over the years and, in a lot of cases, your advisor is a friend and may understand some areas of your business almost better than you do,” says Thomas G. Blonde, partner at Baker Tilly GWD in Elora, Ont. “To find somebody new… to get them up to speed with the history of your business and all the people involved takes time and can be overwhelming.”
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Advisors often have deep knowledge of a farm’s operations, so starting over from scratch with someone new takes time.
An advisor must understand practical matters like finances, skills and technical constraints but also the personal values of business owners. A 2019 study noted that even an 18-month relationship was too short to achieve this type of full immersion.
Why do farm operations even need advisors? “Farmers are now the CEOs, the main operators, the bookkeepers, the janitors,” says Evan Shout, CFO of Hebert Grain Ventures in Fairlight, Sask. “Farmers are overextended and that’s the main reason to bring on an advisor.”
So, the benefits of having an advisor are clear. But what if you have one and it’s just not working out?
Here are six reasons why it may be time to change business advisors:
#1 A change in business structure
The accountants, lawyers and farm advisors with the expertise to support small operations might not be the best resources as the farm grows. Blonde cites the transition from a partnership to a corporation or the addition of new operators to the farm as key times that farmers should consider bringing in new advisors.
“These are examples of situations where you may have outgrown your advisor,” Blonde says.
#2 Lack of industry knowledge
An advisor who lacks a deep understanding of agriculture, including market trends, crop-specific challenges and regulatory changes, will hinder your ability to make informed decisions.
When Liz Robertson was starting out as a farm advisor, she met with a couple whose previous advisors weren’t familiar with the Net Income Stabilization Account (NISA) or how it applied to their farming operation. Robertson, the executive director of the Canadian Association of Farm Advisors (CAFA), calls this a glaring example of an advisor who could harm, rather than help, farmers.
“A farm advisor understands farming, gets the business, gets the sector,” she says. “They have technical education and bring with them an intimate knowledge of farming.”
#3 Stagnant advice
Advisors are supposed to help farmers build their businesses, which means sharing advice on government grants, new technologies or changes to tax codes. That’s why Shout believes it’s time for a change if the phone stops ringing with updates or if your advisor’s advice is similar in all situations.
“Part of their role is to… give you the edge over those that don’t have advisors,” he says. “If you keep going to them with ideas, they get used to you doing the work. When (your advisor) stops coming to you with ideas, that’s the biggest red flag.”
While it’s not uncommon for farmers to read about new approaches to succession or tax planning on their own or to hear about them from their neighbours rather than their advisors, it should be the exception not the rule.
“It’s not a big deal if there’s just the occasional one-off thing (because) there’s always going to be something that your advisor is not familiar with,” Blonde says. “But if you keep hearing that over and over again, those are indications that you might not be getting the advice you should be getting.”
#4 Mistakes
Mistakes happen. Advisors should own up to their errors, offer solutions and ensure that it never happens again. Farmers should start shopping for a new advisor when mistakes are frequent or there are missed deadlines, accounting errors or ones that have an impact on the business and erode trust.
Robertson says mistakes are signs that advisors can’t be trusted, adding, “You’re paying an advisor good money; why would you stick with them if they are making costly mistakes?”
#5 Strained communication
Communication is essential in a professional relationship. When an advisor struggles to explain complex concepts or there are long lapses in communication, it can lead to misunderstandings and missed opportunities.
Shout suggests the issue with the advisor. “You have to have those upfront conversations,” he says. “Give them the opportunity to change. Maybe it changes expectations and it’s not going to be a problem… but if you never have that conversation, you’ll never know.”
Be aware your advisor needs you to be good at communicating too. If you aren’t — let’s say you withhold information, avoid calls or are slow responding to emails — it may be a sign that something isn’t great in the relationship and it’s time to change.
Blonde agrees it isn’t just the quality of the communication that matters. It’s the timeliness, too, Blonde adds. If it’s hard to schedule meetings or it takes forever for calls and emails to be returned, it might be time to move on.
“You could be dealing with someone who is quite knowledgeable and able to give quality advice,” he says. “But if they’re not returning your emails and it’s hard to reach them on the phone, it doesn’t help you at all.”
#6 Gut feeling
Sometimes it’s hard to pinpoint a specific issue and it’s more of a gut feeling that an advisor is no longer the right fit.
You need to look for someone who feels right, someone with whom you’re going to be comfortable sharing everything about your business, trusting that they can come up with solutions,” says Robertson, adding, “You’re paying them a lot of money to provide a service and get results.”
Find the right fit
Once you’ve decided it’s time to look for a new business advisor, follow these steps to make sure the new advisor is the right choice for a long-term partnership.
Ask for referrals: Tap into your peer network. Ask about their experiences with farm advisors. Then research their recommendations. Focus on reviews from operations that are similar in structure and size to yours to ensure the advisor will have the background and experience to meet your needs.
If you prefer to keep your search for a farm advisor more confidential, the Canadian Association of Farm Advisors office can also help you identify potential farm advisors.
Schedule interviews: Selecting a farm advisor is similar to hiring for other roles within the organization. Evan Shout, CFO at Hebert Grain Ventures recommends you interview several candidates and ask pointed questions to make sure the match is good. Your list of interview questions could include:
- Tell me about your credentials and experience.
- What makes you a good fit for our farming operation?
- What services do you provide?
- Who else is on your team?
- How do you prefer to communicate?
- How long does it typically take you to return calls or respond to emails?
- Can you provide references?
Share some info: Providing background information about the farm business allows a potential farm advisor to demonstrate their skill. You can also gain insight into whether their recommendations are right for your operation.
In fact, the advisor may ask for that background. For his discovery calls, for instance, Thomas G. Blonde, partner at Baker Tilly GWD, asks for information about the history and structure of the business, including tax returns and financial statements.
“We want to identify right away if there were mistakes or some major planning opportunity that was missed. It’s the way that we demonstrate our value with a prospective client,” Blonde says. “If I can say, ‘I’ve spent an hour looking through your stuff and here are a dozen things that we immediately identified that… we would be able to help you out on’, it shows there is value in switching to us.”
Be patient: When you’re unhappy with your current advisor, it’s tempting to cut ties and then search for someone new. Blonde believes that’s a mistake.
“It might take some time to find a new advisor,” he says. “You don’t want to be in a situation where you’ve cut ties with your previous advisor and then you need them to file a tax return or prepare a financial statement because you haven’t found someone new.”
Instead, Blonde recommends signing on with someone new before breaking up with your current advisor. He adds that maintaining a cordial relationship can help with a smooth transition and ensures that your new advisor can get the information they need from the previous advisor.
– This article was originally published in the March 2024 issue of Country Guide.
