Many of your clients are successful business owners, accomplished professionals and other well-educated people who are used to being in control. They can go anywhere and do anything they want. As a trusted advisor, you need to strike the balance between letting them be in control and, at the same time, guiding them to a set of options thats going to come up with the best possible result.
As a good CPA, youre essentially a Libertarian Paternalist. A what?
A libertarian is someone who believes at their core that people should be free to do whatever they want to do. A paternalist is someone who is dedicated to helping people and guiding them.
As Nobel Prize-winning economist Richard Thaler explains in his book "Nudge: Improving Decisions About Health, Wealth and Happiness," people should have total free choice, but at the same time, they can be nudged in the right direction to guide them to better decision-making.
The way this relates to our profession is that good accountants are what Thaler would call choice architects. While we live and breathe taxes, balance sheets and accounting all day long, most clients dont understand these things. But when you give them choices about what they want to do (within your field), most of the time they have no idea what to do. Our job is not to overwhelm clients with choices; its to provide them with options in the form of advice.
Many of your colleagues have trouble wrapping their heads around this notion. Theyve spent so many years asking clients: Mr. and Mrs. Jones, what do you want to do here? Clients dont know. Theyre not paying you for options. Google delivers millions of options for free. Theyre paying you to be their choice architect. Instead of asking clients what they want to do about a difficult financial decision, you should be taking the lead, as in: Hey, Mr. and Mrs. Jones, I think A or B will be your two best options, I would do A if I were you. What do you think?
Youre being a libertarian in the sense of: I guide, you decide. Youre telling clients: We should do whatever you want to do. My job is to cipher through the data and put the best options in front of you that I possibly can. Youre being a paternalist in the sense of telling clients: I want to try to move you in the right direction based on the best information we have at hand.
For more about guiding clients through tough decisions, see my article "Dont Succumb to Decision Fatigue."
I guide, you decide
When youre selling professional services, at the end of the day, your client is the boss. They can do whatever they want to do (i.e., libertarian). At the same time, its your responsibility to put good decisions in front of them that will nudge them responsibly toward making the right decisions.
When youre meeting with a client and an important decision is on the table, dont put yes/no choices in front of them. Always make it A or B. I like to take it a step further by saying, In my opinion, based on knowing what youre trying to accomplish, this is what I would do and here is why. Lets go with A. But, if I misunderstood your situation and we need to reestablish your goals, lets go ahead and do that.
Real-world example
Suppose you have a client who is planning to sell their business in a few years. But, in todays business climate, when there are huge piles of acquisition money floating around, good businesses are going for very high multiples. Your client may have received an offer to sell right away for double what an independent valuation told him his business is worth. Now the decision gets more difficult. On one hand, your client wants to delay selling because he believes he can sell for even more in a few years if he keeps growing the business. On the other hand, you know the offer he received may not be there in a few years when your client is ready to sell. Further, you know that if he accepts the offer now, hell have more than enough to achieve all of his familys financial goals without ever working again.
You know your client very well. The "nudge" here is to remind him of his goals and financial plan. Selling today ensures he will meet all of his financial goals, but he might not be ready psychologically to live life without the business his baby. And no amount of money in the bank can replace that feeling of purpose and accomplishment. Thats where you come in.
Again, nobody knows your clients better than you do. As their trusted advisor, you owe it to your clients to create a choice architecture that lets them maintain control, but ensures they understand the pros and cons carefully, of any decision they ultimately make.
Dont be afraid to say, This is what I would do if I were you. Thats why they pay you.
See the rest here:
Are you a Libertarian Paternalist with your clients? - Accounting Today
- Learn from Libertarians | Commentary | thestatehousefile.com - The Statehouse File - March 10th, 2024 [March 10th, 2024]
- Review: Sheriff in 'Fargo' Gives Libertarians a Bad Name - Reason - March 10th, 2024 [March 10th, 2024]
- Why Libertarianism Is Not Mainstream (But Should Be) | Henry Gardella - Foundation for Economic Education - March 10th, 2024 [March 10th, 2024]
- Donald Rainwater to lead Indiana Libertarian ticket as party chooses its 2024 nominees - WFYI - March 10th, 2024 [March 10th, 2024]
- Could the Libertarian Party nominate RKF Jr.? - NewsNation Now - March 10th, 2024 [March 10th, 2024]
- 2024 election: These Libertarians will be on Indiana's ballot - IndyStar - March 10th, 2024 [March 10th, 2024]
- Why Do All These Homosexuals Keep Sucking My Cock? - The Onion - January 4th, 2023 [January 4th, 2023]
- Russell Kirk - Wikipedia - December 21st, 2022 [December 21st, 2022]
- Maj Toure: Why Black Gunsand LibertarianismMatter - December 12th, 2022 [December 12th, 2022]
- Georgia's 'blank ballot' voters | Who are they? And why did they do it? - 11Alive.com WXIA - December 12th, 2022 [December 12th, 2022]
- Exclusive: No official records of personal meeting between Institute of Economic Affairs and Jacob Rees-Mogg - NationalWorld - December 12th, 2022 [December 12th, 2022]
- Markets Fail. . .And Libertarianism Still Works, 10/16 - November 25th, 2022 [November 25th, 2022]
- The Bill of Rights: A Transcription | National Archives - November 7th, 2022 [November 7th, 2022]
- 'Centre, states need to work together for a developed India': FM Sitharaman on 'Atmanirbhar Bharat' - The Economic Times - November 7th, 2022 [November 7th, 2022]
- Libertarianism: Definition & Examples | StudySmarter - October 21st, 2022 [October 21st, 2022]
- In N.H., its live Free State or leave thats libertarianism? - The Boston Globe - September 11th, 2022 [September 11th, 2022]
- Cryptos Libertarianism Is Running Headfirst Into Reality - The Atlantic - September 11th, 2022 [September 11th, 2022]
- The 'red wave' was such a sure thing, of course Republicans are blowing it The Nevada Independent - The Nevada Independent - September 11th, 2022 [September 11th, 2022]
- Jim, Sigal, and Michele just living their best lives - Nevada Current - September 11th, 2022 [September 11th, 2022]
- Long Live the King (My President)! - Econlib - September 11th, 2022 [September 11th, 2022]
- How Housing Is Captive to Investment Demands - Santa Barbara Independent - September 11th, 2022 [September 11th, 2022]
- Arkansas governor candidates hitting the campaign trail - 4029tv - September 11th, 2022 [September 11th, 2022]
- Aaron Rodgers Sounds Off On Government: NFL World Reacts - The Spun - September 11th, 2022 [September 11th, 2022]
- David Boaz - Wikipedia - September 7th, 2022 [September 7th, 2022]
- Arlington Heights board gets petition from Koch brothers-backed group calling for law that may impact Chicago Bears' stadium plans - Chicago Tribune - September 7th, 2022 [September 7th, 2022]
- Georgias Senate Race Is Much Closer Than The Governor Election. Will That Hold Until November? - FiveThirtyEight - September 7th, 2022 [September 7th, 2022]
- Letter: The threat against democracy | Letters To Editor | berkshireeagle.com - Berkshire Eagle - September 7th, 2022 [September 7th, 2022]
- Vote in the State Primary - mysouthborough - September 7th, 2022 [September 7th, 2022]
- Group catering to nonpartisan voters launches ahead of the election The Nevada Independent - The Nevada Independent - September 7th, 2022 [September 7th, 2022]
- Libertarian Party of Wisconsin: Wisconsin Libertarians oppose student loan forgiveness ideas as theft - WisPolitics.com - September 2nd, 2022 [September 2nd, 2022]
- Guardrails of Democracy, Extended: Comparing Notes On The Team Libertarian Report - Reason - September 2nd, 2022 [September 2nd, 2022]
- Attempted Murder Arrest; Libertarians On The 2022 Ballot? PM Patch NH - Patch - September 2nd, 2022 [September 2nd, 2022]
- Chase Oliver could send Georgia's Senate race to a runoff - he's OK with that - The Atlanta Journal Constitution - September 2nd, 2022 [September 2nd, 2022]
- Rep. Stephen Handy, ousted at GOP convention, to wage write-in bid - Standard-Examiner - September 2nd, 2022 [September 2nd, 2022]
- J. R. R. Tolkien among the Illiberals Catholic World Report - Catholic World Report - September 2nd, 2022 [September 2nd, 2022]
- We Made It Through The Primary. Now It's On To The November General Election - Honolulu Civil Beat - September 2nd, 2022 [September 2nd, 2022]
- The Great Separation: Why American Politics Is Coming Apart at the Seams | Cornell Chronicle - Cornell Chronicle - August 30th, 2022 [August 30th, 2022]
- Palfrey eyes the exits- POLITICO - POLITICO - August 30th, 2022 [August 30th, 2022]
- Armstrong: Behind those misleading headlines on Colorado teacher pay - Complete Colorado - August 30th, 2022 [August 30th, 2022]
- What is a Libertarian? Beliefs & Examples | Study.com - August 29th, 2022 [August 29th, 2022]
- Libertarian Vs. Liberal (Whats The Difference?) - The Cold Wire - August 29th, 2022 [August 29th, 2022]
- Libertarianism Philosophy and History - Study.com - August 29th, 2022 [August 29th, 2022]
- Republican effort to remove Libertarians from November ballot rejected by Texas Supreme Court - The Texas Tribune - August 29th, 2022 [August 29th, 2022]
- Media organizations and civil libertarians sue to stop a law that restricts recording videos of cops - Arizona Mirror - August 29th, 2022 [August 29th, 2022]
- How a Tiny Minority Can Lead the World Toward Liberty | Dan Sanchez - Foundation for Economic Education - August 29th, 2022 [August 29th, 2022]
- GOP Candidate Saying it's 'Totally Just' to Kill Gay People Resurfaces - Newsweek - August 29th, 2022 [August 29th, 2022]
- Third Party Candidates: Alabama Libertarians to appear on general election ballot - WHNT News 19 - August 15th, 2022 [August 15th, 2022]
- Sick and tired of the two-party system: Pa. Libertarian Party sees surge in interest | Today in Pa. - PennLive - August 15th, 2022 [August 15th, 2022]
- Voter registrations in North Carolina continue to trend mostly unaffiliated and slightly Republican - The Mountaineer - August 15th, 2022 [August 15th, 2022]
- After Koch's Kinder, Gentler Rebrand Attempt, He Spent Over $1 Billion On 2020 Elections - Daily Kos - August 15th, 2022 [August 15th, 2022]
- Libertarian, Green, and Independent Candidates not Invited to Gubernatorial Debate The Amarillo Pioneer - The Amarillo Pioneer - August 15th, 2022 [August 15th, 2022]
- Runoffs to decide final nominations begins with early voting next week - Yahoo News - August 15th, 2022 [August 15th, 2022]
- Podcast: Muddling Through the Mar-a-Lago Mess - Reason - August 15th, 2022 [August 15th, 2022]
- The Story Behind the Wrenching Finale of 'The Anarchists' - WIRED - August 15th, 2022 [August 15th, 2022]
- The Search of Trumps House + the 5th Amendment - Econlib - August 15th, 2022 [August 15th, 2022]
- Libertarians see opening to gain ground in Georgia 2022 elections - The Atlanta Journal Constitution - August 4th, 2022 [August 4th, 2022]
- State Libertarian Party asks for 'relief from oppressive ballot laws' - The Albany Herald - August 4th, 2022 [August 4th, 2022]
- Election 2022: Primaries clear Michigan fields; more will come at conventions - The Center Square - August 4th, 2022 [August 4th, 2022]
- The Industrial Revolution and the Colonial Conundrum - Econlib - August 4th, 2022 [August 4th, 2022]
- School choice is the free market solution to failing public schools - Washington Examiner - August 4th, 2022 [August 4th, 2022]
- The primary is over Here's who you can expect to see on JoCo ballots in November - Shawnee Mission Post - August 4th, 2022 [August 4th, 2022]
- Climate change and the Supreme Courts version of police abolitionism - The Hill - August 4th, 2022 [August 4th, 2022]
- Discontent Is Never Enough - by Jonah Goldberg - The G-File - The Dispatch - August 4th, 2022 [August 4th, 2022]
- Progressive Conservatism: How Republicans Will Become America's Natural Governing Party - The Ripon Society - August 4th, 2022 [August 4th, 2022]
- Local News: Donnie Brown elected as 149th representative (8/2/22) | Standard Democrat - Standard-Democrat - August 4th, 2022 [August 4th, 2022]
- Former TV anchorman wins GOP nomination in Missouris 4th Congressional District - Missouri Independent - August 4th, 2022 [August 4th, 2022]
- Penn Jillette: Did His Libertarianism Survive Trump and COVID? - Reason - July 29th, 2022 [July 29th, 2022]
- Libertarian and Anti-functionalist: What Is the Memphis Design Movement? - ArchDaily - July 29th, 2022 [July 29th, 2022]
- 11 Pick Up Lines For Libertarians To Use If They Ever Meet A Girl - The Babylon Bee - July 29th, 2022 [July 29th, 2022]
- Nudged into the oncoming lane - Econlib - July 29th, 2022 [July 29th, 2022]
- Quebec's Conservative party surges in the polls as some of its candidates spread conspiracy theories - CBC News - July 29th, 2022 [July 29th, 2022]
- Accusations of racism and abortion politics- POLITICO - POLITICO - July 29th, 2022 [July 29th, 2022]
- Zeldin's Fraudulent Independence Party Signatures Show How Difficult it is to get on Ballot in NY - Yonkers Times - July 29th, 2022 [July 29th, 2022]
- How Republicans can build on Trumpism and become the party of progressive conservatism - The Hill - July 29th, 2022 [July 29th, 2022]
- Illinois quick hits: White withdraws from race; Durbin tests positive for COVID - The Center Square - July 29th, 2022 [July 29th, 2022]
- Romney's Family Plan Isn't Great, but May Be Better Than the Alternatives - Reason - July 29th, 2022 [July 29th, 2022]
- Andrew Yang's third party Forward isn't enough to transcend politics - MSNBC - July 29th, 2022 [July 29th, 2022]
- John Cleese: Wokeism Is the Enemy of Comedyand Creativity - Reason - July 29th, 2022 [July 29th, 2022]
- What's Wrong With Abortion Federalism? - Reason - June 29th, 2022 [June 29th, 2022]
- The myth of American conservatism - UnHerd - June 29th, 2022 [June 29th, 2022]