More small businesses reluctant to seek financial advice

A reflection of declining levels of service offered by banks

Small businesses are increasingly seeking financial help from accountants rather than their bank on account of declining levels of customer service, the Forum of Private Business claims.

Small businesses are reluctant to seek financial advice that could help put their business on a safer footing, according to research conducted by the Forum of Private Business (FPB).

The poll, conducted in conjunction with commercial credit agency Graydon, found that only 20 per cent of small business owners sought advice on a quarterly basis or more, with 68 per cent saying they only did so when they thought it was necessary.

Despite the current economic conditions, 36 per cent of those polled said they had not received any advice in the past year on financial matters with 24 per cent saying this was due to a lack of faith in advisers’ knowledge of their business or the fact they have received poor advice in the past.

When it came to sources of such advice, the research suggested small businesses are increasingly turning to accountants, with 70 per cent choosing this source as opposed to 47 per cent who looked to their bank manager.

According to the FPB, this is a reflection of a declining level of service being offered by the banks, with the increasing trend of established relationship managers being replaced by individuals in call centres, which leads to the loss of long-standing and profitable business banking relationships.

On a more positive note, 29 per cent of small firms said that they were seeking more financial advice now than they were a year ago, and 37 per cent said they expected to seek out more throughout 2009.