It’s dangerous. This business is dangerous. Having good ideas, or great ideas can get you in trouble. Other advisors who have their heads down doing their day-to-day work often aren’t receptive to things they haven’t heard of. If they’re clients are approached with something new that they don’t know about, the knee jerk reaction is usually negative. Instead of taking the time to learn something new, something that may actually help, they simply throw up their hands and bring things to a halt. Why? Ego, maybe. Fear, maybe. But, “not invented here” haunts our profession and hurts our clients.
Recently talked to a business owner who is considering selling his business for several hundred million dollars. Of course, tax basis in the company was low and taxes on sale would be as much as $100 million. Discussions led us to a combination of strategies that would reduce taxes to next to nothing. Completely legal and with a little complexity. Nothing crazy. Nothing that couldn’t be accomplished within a reasonable period of time and with reasonable certainty of the outcome.
Surprise conference call with the attorney, the accountant, and other stakeholders with no chance to have preliminary understandings of the length and depth of the relationships. This is never a good sequence of events. Attorney and accountants and long-time advisors don’t want to be blindsided by an ideas brought to the table by others. Not that they shouldn’t be open to hearing them and even embracing them. In fact, if they put their client first, that should be what happens. But it normally doesn’t. The ideas catch them flat footed, off guard and unprepared. If it’s something they haven’t seen before, they don’t want to look unprepared or unintelligent. Easiest thing to do is to say it’s no good. Too complicated. Too risky.
I have been trying forever to find ways to prevent this. Collaboration with these other professionals with ample time to understand who they are and what they bring to the table is the best way. Clients don’t always give us the time to run our own process but we should be more insistent. They suffer by their own hand. “Not invented here” is the easy way out. Hurts everyone.