Business owners prefer accountants over bank managers

OWNER/managers trust their accountant more than their bank manager when it comes to financial advice, according to a new study.

However, the research, which was carried out by business support organisation the Forum of Private Business (FPB) and credit risk management company Graydon UK, revealsthat SME managers seek such advice fewer than four times a year.

Around 70% of the 400 small firms questioned said that they consulted accountants for financial advice compared to 47% who looked to their bank managers.

Only 20% admitted getting advice quarterly or more frequently. When asked what prompts them to seek professional financial advice 68% of respondents replied only when they thought it was necessary.

Worringly, 36% said they had not met with their accountants or bank managers in the last year with one in four putting this absence down to either a lack of faith in their advisers knowledge of their businesses or the fact they had received poor advice in the past.

The FPB’s chief executive, Phil Orford, said: “An issue that has not been
reported as widely as lending restrictions is the declining level of service being offered by the banks.

“There is an increasing trend of established relationship managers being replaced by individuals in call centres, which leads to the loss of long-standing and profitable business banking relationships.”

Mr Orford said in the light of such changes it wasn’t surprising that more small business owners were looking to trusted accountants rather than their bank managers for advice.

However, he said it was a concern that they were not sourcing help more frequently, particularly during testing times.

“A return to previous levels of service, which means good working relationships between bank managers and business owners, would allow banks to manage risk more effectively and provide the appropriate access to finance to those that need it,” Mr Orson continued.

“On a more positive note, nearly one in three firms surveyed (29%) said that they are seeking more financial advice now than they were a year ago, with 37% expecting that they will need to take more advice over the year ahead.”