Episode 39: How To Evaluate, Change & Maximize Your Advisors


Business is a team sport. Like any successful team, players need to constantly be evaluated. In this episode, Tom discusses how to continually evaluate your tax professional so that he or she is matched to your growth.


02:13 – Evaluating Your Team Starts With Self-Evaluation.

06:23 – How Do You Evaluate Your Advisors?

09:31 – How To Recognize When Your Team Is Aligned To Grow The Most.

15:21 – Who Is The Perfect Tax Advisor For You?

17:00 – Why CPAs Don’t Behave Like Your Doctor Or Lawyer.

21:23 – Listen To Your “Spidey” Senses.

Announcer: This is The WealthAbility® Show with Tom Wheelwright, way more money, way less taxes.

Tom Wheelwright: Welcome to The WealthAbility® Show, where we're always discovering how to make way more money and pay way less taxes. Hi, this is Tom Wheelwright, your host, founder, and CEO of WealthAbility®. What do you do when you outgrow one or more of your advisors? Today, you're going to discover how to evaluate, manage, and change advisors to maximize your growth. One of the first things we learn as business owners is that business and investing is a team sport, and the biggest challenges is the team. How do we set up the team? How do we manage the team? And how do we continue to evaluate the team to make sure that they're still the right team members?

Tom Wheelwright: Jim Collins, in his phenomenal book Good to Great, years ago, he wrote that your goal is to get not just the right people on the bus, but the people on the bus in the right seats. And it's not a lot different from a sports team where you're the coach, and you're trying to decide, “Who do I want on my team?” When we were little kids, what's the first thing we learned at playground? Choosing who was going to be on our team, and when we wanted them on our team. And sometimes somebody that we used to want to be on our team, we didn't want them on our team anymore either because they don't fit the makeup of the team, or they lost a little speed, or it's a different sport.

Tom Wheelwright: So somebody we wanted on our team for basketball might not be the same person we want on our team for football. The same thing is true when we're talking about business and investing. Typically, when we first start out, we're starting out in a job. So, what we're doing is we're saying, “Okay, I'd like to work here,” or, “I'd like to work in this vocation.” The boss says, “Yeah, I'd like you to work here too.” And you kind of figure out, “Well, am I in the right place?” For many people, we find that we're in the right place for that time, we just eventually might outgrow it.

Tom Wheelwright: I'll give you a perfect example. I spent my early career at Ernst & Young, and it was exactly the right place for me. It was. I learned so much about tax returns, and the tax law, and practical application. Then I went to the National Tax Department. I learned all about how tax laws were made, I developed some training skills. Then I came back and started to run the real estate tax practice, basically, for the Arizona practice. And there came a time when I felt like I had outgrown Ernst & Young, and it wasn't a good fit anymore. So I went to Pinnacle West, which at the time was a Fortune 500 company and still a very, very large company, very successful company in Arizona.

Tom Wheelwright: They were looking for somebody in their tax department with real estate experience, and so they brought me in to be the in-house tax advisor. My focus was research and planning, and it was great. I learned about politics. I testified down at the state legislature. I helped write bills. I was able to do some terrific training of our purchasing department and other people throughout the company. It was a terrific experience. After four years, I felt like I'd outgrown that as well. So we're always growing and developing. Now, when I started in my own business, same thing happened, started growing, got growing really fast, brought in a partner.

Tom Wheelwright: That partner was really good that first year and even the second year. By the fourth year, basically, we'd just grown apart, and I felt like I'd outgrown him, and we didn't share the same values. We didn't share the same goals anymore, and so we broke up. It wasn't a friendly breakup. We'd still broke up, and I brought in a new partner who's now been my partner for 18 years, so that was a different kind of partnership. This is a partnership with somebody who grows with me. When we look at who we work with from our team members who are maybe employees, or our team members who may be our advisors or mentors, sometimes we outgrow them.

Tom Wheelwright: Sometimes we go, and we go, “You know what? They were great then, they've not been growing with me.” I had that challenge, and some of you have had this too. I had that challenge with a spouse. I loved her to death, and we were great for about 15 years, and then we started to change in speed and direction. When that happened, eventually, it pulled us apart. We just could not stay together. Now, in hindsight, would I've liked to have actually pulled apart even faster? Yeah, I should have. I really should've pulled apart faster. What I've seen since, here's a key, it's been better for her too. She didn't want the divorce. She did not want the breakup, and yet she's healthier and happier than she was the last 10 years of our marriage.

Tom Wheelwright: So I'm looking at this, and I'm going, “Okay, how does this apply when we have advisors?” Because my job now, I've grown past building a CPA firm. So now what I'm building is, I'm building a network of CPA firms and tax professional firms around the country. We have tax firms all the way from those that really work with the beginner consultant or even some that just primarily work with W-2 on people, all the way up to people who work with extraordinarily sophisticated situations. I mean, things like Malta pension plans and stuff like that. I mean, really donor-advised funds. I mean, there's more complex type of planning situations, so we've started building this network because it was like we only had one size, and so we weren't the right fit for everybody.

Tom Wheelwright: Now, what we're doing is we want to have availability for everybody who wants that availability. We want a billability for all the different levels. Now, we understand that, even within our network, somebody might come in, and they're just starting out, and they might outgrow one member of the network and choose then to move to another member of the network. Now, we haven't had to deal with that yet. It'll be interesting to see how that works. I think it'll work just fine. We'll have a mechanism for that to happen where it's fair and equitable to everybody concerned. It's very important though that from your standpoint you're the investor.

Tom Wheelwright: Frankly, most investors and even investors who are business owners, investors who are business owners are very interesting to me because a business owner for the most part would never consider just turning over his business and walking away when it's in a growth mode. Business owners, they want to build that business. When it gets to the point where it's stable, and it's grown as far as they can grow it, then they'll consider selling it, or they may just decide to continue to grow. What happens is, that the business owner grows, but then turns over their money to an investment advisor, and they don't pay attention to it.

Tom Wheelwright: So, of course, what we advocate with WealthAbility®, that's the whole point of the name WealthAbility®, is that you have a greater ability to create wealth than anybody else. So you are the primary person on your team. Now, you're not going to do it yourself. Investing is a team sport. On the other hand, somebody else is not going to do it for you. So WealthAbility® is all about this idea of participating with your advisors in growing and developing your wealth and your cashflow rather than turning it over to them, or you just doing it yourself. It's this idea that when we work together as a team, and we have the right team members for where we are at the moment, then that's when we're going to grow the most.

Tom Wheelwright: Where I am right now with my sweetheart is, I would not have been ready for her 20 years ago. I met her 20 years ago. I was not ready for her. It wasn't the right time. She had grown much faster than I had. She had had gone through life experiences that allowed her some growth that I didn't have, and so it took me a while to be ready. When I was ready, then we both ended up at the same place, and now we grow together. That's from a personal side. From a business side, it works exactly the same.

Tom Wheelwright: Let's say that you have a financial advisor, and while you're starting out, what you really are looking at is, “I don't know much about investments. I'm going to turn this money over to my financial advisor and allow them to invest in the stock market for me and do something that's simple like ETFs or mutual funds. The reason being that I just don't understand enough, so I'm going to let them handle that because I know the number one thing is I don't want to lose money.”

Tom Wheelwright: That is number one thing in investing, don't lose money because losing money, it's hard to recover. We all found that out in 2008, 2009, and 2010. So what we want to do is we want to have that steady growth. What we we'd really like to do is accelerate that growth. That's why people turn to places like Rich Dad Poor Dad, WealthAbility® to look at alternative investments. Things like real estate, things like oil and gas, things like businesses or other commodities where we have a little more control over how much growth we see in our portfolio, or even in the stock portfolio where we're actually actively trading those stocks.

Tom Wheelwright: So I have actually a couple of clients that they teach stock trading. I'm a big fan of stock trading. I'm not going to do it myself. It's not appropriate for me because it's not the right activity for me. Seriously, we'd rather be poor. On the other hand, like I said, I have two clients who are very successful at it, and they're great teachers. And we've had a lot of clients over the years who successfully trade stocks, but they're not passive.

Tom Wheelwright: They're not passive investors. They're actively involved in their investment strategy, and they have mentors and teachers, and then they may shift as they learn a strategy. Then we go, “Okay, that's a simple strategy. I've got some time under my belt now. I want something that works faster or that has a higher success rate, something that will grow my portfolio faster.” So they actually find other mentors. Well, the same is true in real estate.

Tom Wheelwright: Let's say you say, “Well, I'm going to start out with single-family homes, and you start with a mentor that's doing single-family homes, and you start with education at single-family homes. That's great. What happens though when you decide that, “I want to do apartment buildings”? Well, that's a very different investment than a single-family home. It's a very different investment. Or, “I want to do commercial buildings.” That's a very different investment than single-family homes, so getting the right mentors and the right people in your life to be able to grow that way.

Tom Wheelwright: I mean, I look at WealthAbility®. I started outgrowing the CPA firm. I sold that CPA firm, and now I have a smaller CPA firm, and I mostly spend my time on WealthAbility®. Well, why is that? Now things change for me, so I'm actually actively interviewing some new mentors because I recognized that, well, I have great people in my life. I need people to take me to the next level. I need somebody who knows more about growing an international business than I do. I need to have mentors who know more about this than I do. So I actually went looking for mentors and coaches. Of course, how do you do that? Well, I went to a buddy of mine who is extraordinarily successful in his business. His business is much bigger than mine.

Tom Wheelwright: I said, “Look, here's where we're going. Our plans are to be international, 10,000 CPA firms around the world. I'm going to need help getting there because I don't know how to do it.” And he said, “I got exactly the right thing for you.” He said, “We've been using this system for the last year, and guess what? It's been terrific for us, and I think this would be helpful for you.” I went to a demonstration of it. The other two members of our executive team and I, we attended a presentation. Yeah, it looks like it's going to be a really good step in the right direction. Now, is that the final step? No. No, because I think it will take us, let's say, to 10 times from where we are now. Where we need to go is 100 times from where we are now.

Tom Wheelwright: So that may be yet another growth pattern, and I may need yet another place to go when we get there, recognizing that it's in steps. Now, let's think about other advisors, think about your tax advisor. Now, when you're small, what you need is, you might just need somebody to handle your tax returns because you go, “This is way too complicated. I don't want to do this myself. I don't want to get on TurboTax and do my own tax return. I don't want to get online and do my own tax return.” And then you may say, “Well, I'm going to go to one of these corner franchises.” You go there, and you go, “That's better than doing it myself. I get a little more help.”

Tom Wheelwright: Well, then you start doing alternative investments. Now, all of a sudden you're in a whole different world because those corner franchises aren't going to understand that. They understand IRA's and 401(k)s. They're not going to understand syndications, and real estate, and oil and gas, stuff like that. It's way beyond what they're trained for, and that's okay. They have a very big market that they serve very well, frankly, I think. Now, on the other hand, you've outgrown them. So what do you do? You have to adjust to that, now you may be ready for a CPA. You go looking for a CPA firm, and you go, “How do I even find these people?” Which is the whole purpose of the WealthAbility® network, is so that we can help you find those people.

Tom Wheelwright: We're happy to do that. But my point is is that there will actually come a time that, let's say, you have a CPA firm, and you've been working with them for many years. How do you even know you've outgrown them? We think of doctors, we always think of the specialists. We think of lawyers, we always think of the specialists. If you have a real estate lawyer, they're not going to do your estate planning. They're not, they know. They're real estate lawyers. That's what they do, and then they'll give you referral to an estate planning lawyer. Or the estate planning attorney isn't going to do your intellectual property work, your intellectual property agreements and getting trademarks. That's not what they do. They do estate planning.

Tom Wheelwright: Lawyers and doctors are very good at recognizing that you need a specialist. CPAs, we are not so good at that. We tend to take on more than we should because we go, “Well, I'm a smart guy. I'm a smart person, so I ought to be able to do this.” I personally recognize that there are things I don't do. For example, if you came to me with international tax issues because you are going to live abroad… I just had this happen yesterday. Somebody approached me and said, “I really need somebody with international experience because my husband and I, we're going to go live abroad for four or five years, and we're going to set up a business, et cetera, et cetera, et cetera.”

Tom Wheelwright: And I said, “Great, I will help you find somebody. It is not me. I am not the right person. I will help you find somebody. I do actually have somebody in my network who knows how to do that stuff.” Somebody comes to me with sophisticated pension plan issues, again, not my specialty. On the other hand, somebody comes to me with complex real estate issues, I'm the guy. So I'm pretty self-aware of what I'm good at, what I'm not good at. It's very tough when you're a CPA, especially if you're struggling, and you're struggling to keep clients and build a practice. How do you turn people down? There are clients that, when I was younger, I should have turned down, and I didn't, and they kept me from better clients.

Tom Wheelwright: Now I'm very, very choosy. I've a small firm. I'm very choosy about who I take on as a client because I want those clients, A, that are interesting to me; but, B, who I can really serve at a rate that they can afford and that makes sense to them and makes sense to me. Because the rate I charged 20 years ago is not the rate that I'm comfortable charging today with the amount of experience and training that I have now. I'm not right for everybody. That's why we created this network. But here's the question, so when do you know? Well, when you know is when you start getting that uncomfortable feeling, you look around at your team members, and you're always evaluating those team members.

Tom Wheelwright: Just like a football coach where they're always evaluating, “Okay, does this person match up in this situation?” Somebody who matches up against the Giants may not match up against the Cowboys. They just don't match up the same because you're playing different teams. Well, in investing it's very much the same way. How do I match up? How do I make sure that if I've been investing in stocks, and bonds, and mutual funds, and I've been investing through 401(k)s, and now I want to invest into real estate, do my advisors understand that new direction? And they may not.

Tom Wheelwright: Looking at, what's their specialty? I would always be interviewing my advisors, and the minute I got this feeling, I'm going, “Wait a minute. I'm not so sure that they know this.” If you get that uncomfortable feeling, then it's time to start evaluating. I mean, I'm a huge believer in we get senses from an energy standpoint. I know this is a little woo-woo, we get a scent. What do they call it in the comic books? A spidey sense, right? My spidey sense is tingling. I think that happens to every entrepreneur and investor who's really paying attention. That's the number one key is, we have to pay attention.

Tom Wheelwright: If we just turned over to somebody else… And I've done this before, I turned my business over to somebody else. They were good people, and they absolutely had my best interests in mind. That doesn't mean that that was the right thing to do, and I won't do that again. I'll say, “You're in charge of this.” At the same time, I'm watching. I am always watching, so I want to make sure I've got the report in place and make sure that anything that feels uncomfortable to me that I'm going to start pursuing that. One of the keys is, A, develop a team. That's the number one key is make sure that you're not doing this all by yourself, especially if you're doing nontraditional investments.

Tom Wheelwright: Even if you're doing traditional investments, you may not want to be doing it by yourself. You may want that financial advisor. When you start doing nontraditional investments, you probably want a different type of financial advice or financial strategist. It may not even be advising you need anymore because you may be really developing your own WealthAbility®, and so now you're the one in charge. You're just adding team members because you're learning how to add those team members, so you add those team. Okay, now I got a team. Now I have to be constantly evaluating my team.

Tom Wheelwright: And then the third one is probably the hardest, and that is, what happens when I have a team member that is no longer the right fit for me? How do I deal with that? Well, you can do like… My wife who's also a CPA, has her own CPA firm, she said, a while back, she had a client who just sent her an email. He stopped returning calls and sent her an email saying, “I'm using somebody else.” Not my favorite approach to it, he'd been a client for many, many years. That's a little too much bridge burning for me. I love relationships. Now, I had a client come to me, and the way he told his accountant that he was moving was he actually took them on a camping trip.

Tom Wheelwright: They went camping and because they did that from time to time. They were buddies, went camping and said, “Look, are you really still comfortable doing my work? I feel like I've doing stuff that is beyond what you're currently doing, what you're able to do.” And they were fine because, here's what to remember, it's kind of like if you've ever been fired from a job. I have. I was fired by Price Waterhouse after seven months, so I did not last long there. It was the most miserable seven months of my life. I can honestly say that. Was it Price Waterhouse's fault? Not necessarily, I'm going to give them some responsibility for that. Was it my fault? Absolutely. I'm going to take my share of responsibility too.

Tom Wheelwright: What was clear though is that it was not a good fit. I was unhappy every single day in that job. Every day I was unhappy in that job. So when the partner came to me, and sat down with me, and terminated my employment, at first first you're mad. And then I'm going, “This is great.” I still appreciate that that partner did that because I was miserable, and I wasn't producing. I was one of the most talented tax people in that entire office, and yet the seat I was in was not the right seat. It absolutely was not the right seat. Even if I'd been on the right bus, I was not in the right seat there, and it just wasn't a fit, so it was really good for me.

Tom Wheelwright: WealthAbility® would never have happened had it not been for that. All the hundreds of thousands of people who've read Tax-Free Wealth would never read Tax-Free Wealth if I were still at Price Waterhouse, so it wasn't the right thing. I know I'm in the right place now. Everyday I get up grateful for my clients. I get up grateful for my team, both my Wheelwright Manahan team, which is my CPA firm team, my WealthAbility® team; and the Rich Dad team, which you all know, I do a lot with Rich Dad. I really appreciate that team. I really appreciate having mentors like Robert and Kim Kiyosaki.

Tom Wheelwright: Kim doesn't really know this, I really need to tell her so maybe she'll listen to this podcast. But I'll go back and tell her directly. I don't just look at Robert as a mentor. I absolutely look at Kim as a mentor. I've watched her make difficult decisions in her life that, I'll tell you what, it's gutsy, and it's amazing what she's done. So I have great mentors. I have Ken McElroy as a mentor in real estate. I have Brad Sumrok as a mentor in real estate. I have Buck Joffrey as a mentor in raising money, and I'm learning new things from his real estate. I mean, everybody I work with, I learn from, and all I want to do is I just want to grow. I just want to grow faster and faster and serve more and more people.

Tom Wheelwright: Well, if that's where you are, you always have to be looking at, do I have the right team in place? Do I have these people in place? Do I need to replace somebody? Do I need to move somebody? We moved recently somebody from a position into a new position. They're a great team member. They were in the wrong seat. We brought somebody new in to be in that seat. We moved them into the seat, and they are just loving life because now they're in the right seat. I'm seeing all sorts of, I mean, enthusiasm and progress that I hadn't seen for a while. So sometimes it's a matter of getting them the right seat.

Tom Wheelwright: Sometimes it's a matter of you don't have a seat for them anymore, and then you have to make that hard decision. Whether it's your tax advisor, your financial advisor, your attorney, whether it's one of your other team members, your real estate agent, consider that we always need to be upgrading our team. Be sensitive to it, and when you're ready to make that change, don't be afraid of making the change. It's not easy. At the same time, remember that if it's not right for you, it's not right for them. If it's not right for you, it's not right for them. Now, I'm hoping I'm right for all my clients. I think I am. I really love every single one of my clients.

Tom Wheelwright: If you're listening out, hopefully my clients are listening here, if you are, just know I appreciate every one of you, every single one of my clients. I get feedback from my clients, and it's not always pleasant because I make mistakes. I want that feedback. One of the things that you want to look for, in my opinion, in an advisor and a team member is somebody who will take feedback and act on that feedback, be honest with that feedback, and wants to grow from that feedback. If that's the case, it's much better to have them grow with you.

Tom Wheelwright: I mean, for example, let's say you've got a CPA that you go, “You know what? I need them to grow faster. I need them to know more from a technical standpoint. I need them to do better with their business.” Send them to us. We have a whole network of CPAs. We want more CPAs in our network. Sometimes it's a matter of let's get them in the right seat. Maybe it's the right CPA, and they're just in the wrong seat. Maybe they need some opportunities. Maybe they need new team members. So whatever we can do to bring our team members along or evaluate them, release them, whatever it is, here's what's going to happen. When we pay attention to our team, when we're always upgrading our team, when we're always evaluating, managing our team, we're always going to make way more money and pay way less taxes. See you next time.

Announcer: You've been listening to The WealthAbility® Show with Tom Wheelwright, way more money, way less taxes. To learn more, go to wealthability.com.