Botkeeper
Gretchen Pisano sat down, metaphorically, with Botkeeper’s Jody Padar to examine uncertainty as it relates to the intimate relationship between CPA and client. At this stage in the COVID-19 trajectory, fear and anxiety are transforming otherwise level-headed decision makers into erratic, uncertain, paralyzed citizens.
I cannot see very far out into the future, but I know how to put one foot in front of the Next. — Gretchen Pisano
The CPA’s role in the midst of fiscal uncertainty is to help batten down the hatches and prepare for what comes next, which begs the obvious: how can anyone know what's next? Uncertainty and not knowing are a CPA’s worst nightmare.
Gretchen, with her background in leadership consulting and human psychology, walks Botkeeper’s very own Radical CPA through the tumult.
People in Fight-or-Flight Mode Behaving in Unmappable Ways
As CPAs, we feel we intuitively know our clients and can gauge their unique relationship to financial risk and their tolerance for market fluctuation. However, what CPAs are seeing now, in the face of a global health crisis that is grinding our economy to a halt, are people in fight-or-flight mode behaving in unmappable ways.
Identify a Client’s Risk And Anxiety Tolerance, And Everything Will Follow From There
The current scenario seems to lend itself to a seismic shift in how CPAs serve client needs and the kind of information CPA firms need to collect from a client to determine precisely what those needs are. Gretchen helped us at Botkeeper determine the key to effective financial advising during a crisis: identify a client’s risk and anxiety tolerance, and everything will follow from there.
Clients are going to be putting pressure on their CPAs to tell them what to do to protect them from this storm. What CPAs can do is advise based on what they know. At the end of the day, the CPA’s grasp of the legislative tax and financial aid materials that the government is pumping out is going to make more sense to them than it will to a layman.
What clients want is to have a conversation with their CPA that feels like they're talking to somebody who knows a little bit more than they do about this. You will be able to advise on risk points and the benefits. What you’ll find is that some people will want to move really fast toward action because they have a high risk tolerance or because they have a low anxiety tolerance. In order to understand your client, CPAs must determine the individual client comfort zone.
First Steps in Rebuilding Best Practices
As a first step, CPAs will have to recreate a current-state client risk assessment. Gretchen believes that this can be produced through asking very simple, human questions:
Where is there new value that you would want to try to create?
The CPA’s Job Is Not to Be a Fortune Teller
From there, Gretchen is a strong believer that providing people autonomy of choice is empowering and gives a sense of control. The CPA’s job is to provide subject matter expertise.
What we can offer is a better understanding of the implications of financial documents and law. The best and most helpful thing a CPA can do in this atmosphere is provide a rough blueprint of several different options and potential outcomes in terms of benefits and risk. This information gives the client autonomy and power of choice. And right now, Gretchen insists, clients are going to want that. They’re “going to want to have a sense of being the mistress of their own destiny.”
Stay tuned for how to work with these data points…we would love any suggestions or comments on how CPAs are engaging with clients in these difficult times. It’s up to us to create Next Practices together!
For more insight, listen to the whole interview here!
