Your lawyer and/or CPA might be giving super crappy advice without you even knowing it. If so, that could cost you a pretty penny. No bueno. How are you ever going to know if your team members are qualified? It’s not easy. They might even be smart but incapable of giving you the advice you really need. And they might have just enough expertise to fool you into thinking they are geniuses.
It’s really hard for the average Joe or Josephine to really know if they have competent council. But you need to make sure the person on the other end of the desk is leading you in the right direction. Here’s how to do so.
Your first line of defense against bungling professionals is to check with their state-run professional associations and the Better Business Bureau. That’s a no-brainer of course but few people bother to check. Ask your professional for the contact information for her professional organization and make the call. You might be surprised at what you discover.
Sometimes lawyers and attorneys get involved selling investments (bad tone) and if so, you should also check with the State insurance commissioner, the SEC and FINRA. These are the organizations which oversee people who sell insurance and other investments.
2. Other Professionals
Just because your lawyer or CPA has a clean record, it doesn’t mean they know what they are doing or that they have provided the best advice for your particular needs. One useful way to flush this out is to talk to professionals who often work together with CPAs and lawyers such asfinancial advisors.
Of course this advice is very self-serving because I’m a financial advisor – but that doesn’t mean you should dismiss the idea. Do me a favor – call another advisor if you prefer. That’s fine. Just do your due diligence Pilgrim.
Just run your CPA and attorney’s ideas past another professional who has a different angle on the same problem. This keeps everybody honest.
Keep one thing in mind. You’ve got a problem if you get great advice from everyone except the person who should be providing it.
You meet with your CPA and she asks why you don’t have your trust updated. That’s a question your attorney should have raised.
Or you meet with your financial advisor and she asks why you haven’t set up a retirement plan and/or set up quarterly tax payments. These are issues a competent tax person would have brought up long ago.
If you are getting great ideas from the wrong people, ask the intended party why they didn’t bring it up. Of course nobody is perfect but if this happens more than once (maybe twice) you might be dealing with someone who isn’t spending the kind of time on you that they should.
Of course the opposite of this is true and even more dangerous. Sometimes a qualified individual will provide advice in an area they know little about. That can really be costly if you pay attention to their ill-formed ideas.
I was working with a brilliant CPA who was great when it came to doing the tax work. The only problem was he wouldn’t keep his trap shut about my client’s business operations. Again, the guy was a regular Einstein when it came to the tax code but he was no expert in business operations. After many failed attempts to get him to butt out, we finally had to fire him for the sake of our own sanity.
3. Universal Gut Check
If your gut tells you something is wrong pay attention because you could be right. This is the time to talk to two competing accountants or lawyers. Get a second and third opinion. I recommend that you speak to two other sources so you don’t get lopsided ideas meant to simply steal your business. This move isn’t free but probably well worth it.
Along the same lines, if your professional makes numerous and/or expensive errors or is habitually making excuses for not completing the work on a timely basis, it’s time to move on. Where there is smoke there is fire – sometimes an inferno.
It’s no fun to second-guess a professional. It’s intimidating and if you’ve worked with the same person for a long time, it can be scary.
Just the same, it’s your money and your financial future on the line. Don’t be afraid to ask the hard questions. And if your tax or legal professional is qualified, she won’t feel threatened. She’ll probably welcome the scrutiny because you may just uncover that she’s more qualified than you thought. And if you find problems, you can do something about it before those problems become extremely expensive.
Is your CPA and attorney qualified? How do you know?