Author: Conor Boyd

In today’s fast-paced business environment, small to medium-sized enterprises (SMEs) face unique challenges. They often require the expertise of seasoned financial professionals but may not have the resources to bring on a full-time financial advisor. Enter the fractional financial advisor, a growing trend that offers a strategic solution to this dilemma. 

What is a Fractional Financial Advisor? 

A fractional financial advisor is an experienced financial professional who provides specialized guidance to businesses on a part-time or project basis. Unlike traditional consultants, who often offer broad advice and step back, fractional advisors roll up their sleeves and integrate themselves into the business for a set period, typically ranging from a single financial quarter to over a year. This hands-on approach ensures that the advice given is not only practical but also implemented effectively. 

How Does It Work? 

Fractional advisors are brought into the business to tackle specific financial challenges or to provide ongoing strategic advice. This can include everything from investment planning, tax strategy, and portfolio management to more tailored services like retirement planning for the business owner and financial wellness programs for employees. The advisor becomes an 

integral part of the team, attending meetings, analyzing financial data, and collaborating closely with the business owner and key stakeholders. 

Because fractional advisors work on a part-time basis, businesses gain access to top-tier financial expertise without the overhead of a full-time salary. This flexibility allows SMEs to scale their financial advisory needs according to the business cycle, receiving the precise level of support required at any given time. 

Benefits to Business Owners and Employees 

For business owners, engaging a fractional financial advisor means receiving high-level strategic guidance tailored to their specific needs. Whether it’s optimizing cash flow, navigating complex tax regulations, or planning for future growth, the advisor’s insights can significantly impact the company’s financial health. 

But the benefits extend beyond the owner. Fractional financial advisors can also design and implement financial wellness programs for employees, providing them with the tools and

knowledge to manage their finances more effectively. This not only boosts employee morale and retention but also aligns their financial well-being with the overall health of the business. 

Is a Fractional Financial Advisor Right for Your Business? 

In an ever-evolving business landscape, the role of fractional financial advisors is becoming increasingly vital. By offering flexible, expert guidance, they provide SMEs with the strategic insights needed to thrive—without the commitment of a full-time hire. Consider exploring this innovative approach to financial management and take the first step toward securing a more prosperous future for your business and your employees. 

If you’re a small or medium-sized business owner looking to enhance your financial strategy, a fractional financial advisor could be the key to unlocking your company’s potential. The first step is to assess your business’s current financial needs and challenges. 

At Thoroughbred Advisors, we specialize in providing tailored financial advice that aligns with your business goals. Contact us today to schedule a meeting, where we can discuss your specific needs and determine how our fractional advisory services can best support your business’s growth and success. 

About Thoroughbred Advisors: 

Thoroughbred Advisors: Your Premier Financial Partner in the Capital Region. With 7 flagship offices, a team of 129+ dedicated advisors, and a network of over 240 brokers, we are committed to delivering personalized financial solutions that go beyond the offerings of big-box institutions. Our mission is to be the top choice for clients and advisors seeking a trusted, relationship-driven financial firm. 

www.thoroughbredadvisors.com 

421 Troy Schenectady Rd, Latham NY 12110 

Registered Representatives and Investment Adviser Representatives offer securities and investment advisory services solely by Equity Services, Inc., Member FINRA/SIPC, 421 Troy Schenectady Rd, Latham NY 12110, 518-608-4608. Equity Services, Inc. is a Broker/Dealer and Registered Investment Adviser affiliate of National Life Insurance Company (NLIC), Montpelier, Vermont. National Life Group is a trade name of NLIC and its affiliates. Thoroughbred Advisors is independent of Equity Services, Inc. In CO, MO, NH and WI, Equity Services, Inc. operates as Vermont Equity Services, Inc.

For the past twenty years, I have marveled at the thousands of strategies for making money in the markets and making money in business.

Often these strategies are completely contradictory to one another yet when applied appropriately, both can work. For example, some investors consider themselves contrarian investors, one of the most famous being Warren Buffet. These investors tend to look for companies who have depressed stock prices, not so much from the company’s doing but the environment in which they find themselves. When many others are selling, contrarians are looking to buy. On the other end of the spectrum, you have momentum investors who are looking for stocks that have higher prices over some period. In a sense they may be looking for a speeding train, jump on and ride that momentum to higher gains.

Very different philosophies and both can work when applied appropriately.

The above sets the framework for a distinction I would like to share and an opportunity you have as a business owner or investor in this New Year. Though there are thousands of ways to make money in business and the markets, I have been able to identify only two variables that tend to be present when people lose significant money in business or investing. I want to be clear that these are my personal observations over the past twenty years of meeting and working with thousands of business owners and investors.

The Impact of a Liquidity Crisis and Overconfidence

The two variables I have identified after examining many failed businesses and investments are a liquidity crisis and over confidence. These can happen in any order. When someone has a liquidity crisis, they are often forced to sell assets at inopportune times. Inevitably, the times at which people need money are exactly at a time when selling assets is not necessarily favorable. Think about the Pandemic. This gave many business owners a crash course in how quickly a liquidity crisis and overconfidence can create significant losses. The hospitality industry was hit harder than most industries. What do you do when you have a fully staffed restaurant that has invested significantly in their infrastructure to create a wonderful dining experience for their patrons, and ALL the patrons go away in one day?

The government stepped in and was able to help many of those businesses but for the ones who lacked liquidity to keep their doors open until that help arrived, in many cases these businesses were forced to close their doors forever.

How about some of the large bank failures? Perhaps there was overconfidence after years of low interest rates and controlled inflation that the Federal Reserve would raise interest rates at a snail’s pace should the need arrive. This would give these banks enough time to get their assets matched appropriately to their liabilities. As history has now revealed, this was not the case, and many banks failed.

Liquidity is an area that we spend a significant amount of time discussing and investigating with our clients. Each client, depending on many different variables, has a different number for what constitutes an appropriate level of liquidity. How this liquidity is housed can also vary widely. Simply leaving money in a business checking or brokerage money market account can have a significant drag on potential returns over the years.

Many of the business owners I work with have thriving businesses. With that said, when I look at the past 5, 10, or 15 years and ask them what they have to show for it…they sometimes look back puzzled. ‘What do you mean? I have a thriving business.’ Which is true, but often, that thriving business has supported an equally thriving lifestyle. As entrepreneurs, aside from lifestyle, we often are geared toward investing everything back in our business. And this can be a winning strategy…until a liquidity crisis and/or overconfidence rears its ugly head. If you have been in business long enough, you know exactly what I am saying as you have likely weathered a number of these storms.

I believe that if you are a business owner or serious investor, quantifying your need for liquidity and how to house it should be part of your New Year’s Resolution. One of the things we say at Thoroughbred Advisors is, “every day is a good day to save, but not every day is a good day to invest.”

If you would like to involve a financial professional in your discussions regarding your liquidity and growth strategies feel free to reach out to us at 518-608-4608 to have a complimentary consultation.

The information provided herein is for general informational purposes only and should not be considered investment advice. Any strategies described may not be suitable for everyone. Readers are encouraged to evaluate all information in light of their own situation, and seek the advice of an appropriate professional advisor.

Thoroughbred Advisors is a leading financial firm dedicated to providing tailored, transparent, and authentic financial solutions for their clients. Established in 2014, the firm focuses on empowering individuals, families, and businesses in the Capital Region to achieve lasting financial success.

www.thoroughbredadvisors.com

Visit our office at 421 Troy Schenectady Rd, Latham NY 12110