These days there is a lot of ‘help’ out there for owners of independent advisory firms provided by broker-dealers, custodians and assorted financial product companies. Most of this help falls into one of two categories: business consulting and business coaching. Many folks use these terms interchangeably, including some coaches and consultants themselves.

And, yes, there may be a bit of overlap in the services that a few coaches/consultants offer. But not as much as you’d think. That’s because real business coaching and business consulting involve very different kinds of help for owners and their firms.

To get the results they are looking for, owner advisors need to be clear on the kind of help they need.

In simple terms, the difference between the two boils down to this: Coaches tell owners what they need to hear; consultants them what they need to do. Let me explain.

Some firm owners (who have business backgrounds, went to business school or have worked with a business consultant) know what they need to do to make their firms better: more successful and/or more like the businesses that they really want to have. But for various reasons—which in my experience, are far more common than one might think—some owners have a very hard time actually doing what they need and want to do.

Enter the business coach. I know what you’re thinking—that this kind of self–destructive behavior requires a psychologist rather than a coach. And you’d be right. But the ‘but’ here is that many people a lot smarter than me have observed that great coaches in any sport or field are, at heart, great psychologists.

And this is definitely true when it comes to business coaching. Business coaches provide a number of valuable services: they help owners to identify their strengths and weaknesses, to explore the reasons behind their self-destructive behaviors (a lack of confidence, the fear of success, etc.). They help create goals and provide accountability for working toward those goals and, perhaps most important, they remind owners of their strengths and help them maintain confidence in themselves: to succeed but also to deal with setbacks and keep moving forward.

We business consultants have a very different job. Yes, sometimes we do these things (helping advisors deal with setbacks comes to mind), but even then, we come at it from a very different angle. As I mentioned, business consultants are for owners who don’t know what they need to do to make their businesses more successful. Now, don’t take this the wrong way, but in my experience, that’s the vast majority of owner advisors.

And there’s no reason why they should know. Most advisors are trained to be financial professionals, not to run a business. (In my experience, most doctors and lawyers aren’t very good at running their businesses, either.) So the job of a business consultant is to teach owner advisors what they need to know to successfully run an advisory business: to train them be good business owners. In the vast majority of cases that means pointing out the things in their businesses that they aren’t doing, or need to be done differently and better. Essentially telling them that “they” are the problem.

As you might imagine, most owner advisors respond to this aspect of consulting a bit differently than they do to being “motivated” by a coach. I don’t think anybody really likes to hear that they need to do things differently, and people who have been running the firms they founded for some years seem to like it even less. So,consultants need to employ some psychology, too, although in a different way.

I’ve been working with owner advisors for a lot of years now, and I’m still surprised by how many of them want their firms to be different—larger, better client service, more profitable, etc.—but they resist doing anything differently from what they are currently doing.

Consequently, like other consultants, I spend much of my time working with owners to see their business as it really is today, thinking about how they’d like it to be, devising a plan to get from here to there, and then implementing that plan, one step at a time.

I’ve found that it’s important for a consultant to be able to see what needs to be done to make a business more successful, but it’s way more important to teach the owner to see it, too. Because if they can’t see it, there won’t be any urgency for change. And then to teach them to train their successors to be good owners, too.For advisory firm owners the question of what kind of help they need boils down to:

  1. Do they know what needs to be done to be more successful, but need a coach to help them actually do it? or
  2. They need a consultant to teach and train them to be successful business owners.

What’s behind door No. 2 is the harder choice: it involves admitting that “you” are the problem. But as it turns out, it’s what most owner advisors need to take their firms to the next level—and beyond. 

See these recent blog postings and columns by Angie Herbers:

6 Ways Business ‘Gurus’ Can Lead Advisors Astray

Overcoming Mental Mistakes That Limit Your Firm’s Success