Xentum | Why working with younger entrepreneurs is different for financial planners

Why working with younger entrepreneurs is different for financial planners

June 7, 2016 - 5 minutes read

Posted by Claire Parker

A good financial planner is a powerful commodity for an entrepreneur to have particularly for the growing elite of younger entrepreneurs.  My experience though is that entrepreneurs don’t think in the same way that financial planners do and vice versa and they both need to get over it to succeed together.  Below are some reasons why I think this is the case:

Long Term Cash Flow or Goal Planning doesn’t work with young entrepreneurs.

Personal Cash flow forecasting is great and adds an amazing amount of value particularly at the older end of the spectrum, but it simply doesn’t work with younger entrepreneurs.  The guys that I have been working with simply have too much going on in their business world to really understand where it is all going.  Each day presents a challenge and I once heard a quote that business owners “have the highest highs and lowest lows all in the same day”.  Is this the right environment to really try to understand what your long term goal is?  The chances are that it will change too frequently and just cause confusion.  Of course, I am being generalist here but how many in their 20s and 30s really have it all figured out.  I certainly don’t and although I know I want to make sure my family is protected, my business head means that it is difficult to really nail down my long term objectives until I understand where my business interests go.  Short term goals maybe over a year work brilliantly and can have just as much impact from my experience.  Businesses are run on cash flow by days, weeks and months and I think it makes sense to align personal finance with this for the younger entrepreneurs.

Risk for an entrepreneur is a reality, not a questionnaire

I don’t really believe in risk tolerance and capacity for loss questionnaires for the type of clients that I deal with (i.e. younger business owners), although the finance industry and the financial regulator are very keen on them.  I think your situation dictates your level of risk.  If you are younger and you want to grow your money then you generally need to take more risk.  However, “risk” for an entrepreneur is not a questionnaire.  It is a reality of everyday life, whether that is an accident in a workplace, a damage of brand or reputation or maybe a loss of a key client.  This is why it it such an important decision to partner with a financial planner who doesn’t have an agenda to sell you the latest hot investment or tax angle.  They need to understand that you have enough risk in your life and life is too short to make mistakes outside your business.  This is the big reason for “inertia” in personal finance for entrepreneurs.  They don’t want to deal with the risk of hiring the wrong person, they have enough risks within the business!  

Planning for entrepreneurs comes with more stuff, good and bad!

A company is a vast array of opportunity from a planning perspective and is incredibly different to dealing with a professional that works within a firm.  I know this from personal experience.  Having the right advisory team is absolutely crucial in giving good advice as to how to structure business affairs.  When it comes to structuring personal affairs, this nearly always becomes secondary on an entrepreneurs radar, if it appears at all.  Getting money out of the business environment into a personal finance world is probably the overall goal of most entrepreneurs yet little planning goes into this.  Company owners have a lot more options than your average professionals and don’t use most of them.  There are lots of incentives and allowances to benefit from that makes the planning and opportunities different, from life cover to pensions, to investments in other companies.  Planning for an entrepreneur is simply a different world and often underused because we often hear about the bad outcomes.  

Time is precious, get to the point or use technology

Financial services just hasn’t kept up with how productive we can be now with the right technology.  Most younger entrepreneurs spend their days on slack,skype or google hangout with their advisers or staff rather than timely and costly face to face meetings.  Too much email and information kills productivity and therefore new channels are needed to communicate with this audience.  Whatsapp have just designed a secure desktop portal and google keep pushing the boundaries in this space.  I also like the uses of schedule once and calendly to keep the face to face meetings focused and a good use of time.  The point here is that a well scheduled and time sensitive meeting can add a huge amount of value to the business owner.  

Younger entrepreneurs want more than your technical advice

There is a misconception amongst the younger entrepreneur and financial planner communities that value lies within the technical advice, i.e. the latest tax saving, or making more money from investments.  This is what I call a good “result” from sound financial planning or even a minimum expectation.  The real “benefit” (which is a completely different and more rewarding thing) is that a good working partnership with a financial planner could mean something like “you make better decisions” or “have a better overall feel of your financial situation, minimising stress outside your business.”  So when you work together, yes results are important but benefits to the client or younger entrepreneur are more important and is where the value really lies.


A younger entrepreneur working together with a good financial adviser/planner can be a force to be reckoned with.  I have experienced this first hand and it’s awesome.  In the US, this is much more common than the UK, particularly in Silicon Valley where it is absolutely crucial that you build a good team around you.  Hiring a good financial planner can be a very big step forward in this journey but it is important that for it to work successfully, the financial planner understands that the world of a younger entrepreneur is completely different to the more traditional channels of financial advice.  The five points above are only really scratching the surface, what are your experiences of this relationship, if any?


I am now offering free 45 minutes confidential Skype sessions for entrepreneurs up to the age of 42.  Click here to find out more details and book a session.