The Difference Between a Good Broker and a Great Advisor

Good brokers will be outpaced by great advisors. Being outpaced leads to trouble.

You'll grow a smaller book, a sliver of the market. Losing a handful of contractors will feel deeply personal, and at times, isolating.

Great advisors are slowly eating your lunch. Navigating as just a good broker feels heavy.

Heavy because of the pit you feel in your stomach. At times nauseous. You're still paying off that newly renovated downtown office. It's beautiful. Fully renovated, an original brick feature wall, the nicest leather armchairs. But, this all comes at a cost.

The pit gets bigger. Next week is payroll.

You're responsible for the livelihoods of 8 staff. Moms, Dads, kids, and that cute golden retriever that visits the office every second week. The guilt builds.

Your confidence slides. Self doubt kicks in. You recoil.

Isolating from others because you know deep inside that a wave of bad news is about to hit. You can't even share with your team because it punches every one of them.

It's like running in sandals on ice. You can move, but each move is treacherous.

Luckily for you, you're no longer just a good broker. You've graduated to great.

Here's how that good broker became a great advisor.

1) Transactional vs. Strategic Partnership:

• Good Broker: Focuses on the immediate task of securing a bond for a specific project, reacting to client requests.

• Great Advisor: Takes a long-term, strategic view, aiming to build a lasting partnership that supports the contractor's overall business growth and bondability.

2) Surface-Level vs. Deep Industry Insight:

• Good Broker: Possesses adequate knowledge of surety products and basic underwriting needs.

• Great Advisor: Demonstrates deep expertise in construction finance, industry trends, and the nuances of surety underwriting. You're a true subject matter expert.

3) Reactive vs. Proactive Client Engagement:

• Good Broker: Responds to client needs when they arise. Mostly when a bond is urgently required.

• Great Advisor: Proactively engages with clients, anticipating future needs, identifying potential issues, and offering escape routes before problems escalate.

4) Information Exchange vs. Interpretive Guidance:

• Good Broker: Communicates information between the contractor and the surety.

• Great Advisor: Translates complex financial and surety language. Helps both parties understand each other's perspectives and the underlying context of requests, decisions, positions.

4) Standard vs. Advanced Tools & Resources:

• Good Broker: Utilizes standard industry tools and processes for bond issuance.

• Great Advisor: Leverages advanced analytical tools (like coSurety.com), industry benchmarks, and a network of complementary professionals (CPAs, attorneys) to provide holistic advice.

5) Symptomatic Problem Solving vs. Root Cause Analysis:

• Good Broker: Addresses immediate bonding challenges or issues as they appear.

• Great Advisor: Digs deeper to identify the root causes of bonding limitations or financial weaknesses, then works with the contractor to implement longterm improvements.

6) Information Exchange vs. Interpretive Guidance:

• Good Broker: Communicates information between the contractor and the surety.

• Great Advisor: Translates complex financial and surety language. Helps both parties understand each other's perspectives and the underlying context of requests, decisions, positions.

7) Submitter vs. Advocate Relationship with Underwriters:

• Good Broker: Submits applications and documents to underwriters.

• Great Advisor: Uses their deep understanding of the contractor's business and their trusted relationship with the surety to secure the best possible terms.

8) Limited vs. Comprehensive Teachable Moments:

• Good Broker: Provides basic instructions on what documents are needed.

• Great Advisor: Educates clients on the importance of financial transparency, strong internal controls, and strategic financial planning. Building their bondability.

9) Transactional Success vs. Transformational Growth:

• Good Broker: Measures success by the number of bonds issued and commissions earned.

• Great Advisor: Measures success by the tangible growth and improved financial health of their contractor clients, becoming an integral part of their long-term success story.

Do more than just process paperwork. Start truly understanding and influencing a client's financial health and project success.

Run with a few of these habits and you're already closer to being great. Great advisors outshine good brokers. Grab your sunglasses, life's about to get bright

10 Ideas for Brokers to Get Timely Financials from Contractors

You've had it. You’re fed up with contractors leaving their financials until the last minute. Creeping are: deadlines, Surety expectations, and the annoying vortex of copying and pasting the email you sent last month, just to resend this month.

Instead of whipping that dead horse, change the game and give contractors reasons to start.

Here are 10 actionable ideas for brokers to consistently get financials from their contractor clients.

You'll set expectations, teach why, and provide tools.

Set early expectations

Show your contractors the road. Less veering through the dark forest. Do this by:

• setting clear expectations early. From your first meeting, help them understand reporting frequency, deadlines, and the documents you need. Have an onboarding package that outlines everything.

• providing a standardized document checklist. Offer contractors an easy-to-follow checklist of all financial documents. Make the task less daunting.

• pulling together a communication schedule. Establish a communication cadence with contractors, including gentle reminders (well in advance) of due dates. Automate these.

• breaking down big requests. Instead of asking for all financials at once, ask for quarterly financials separate from yearly. Try not to overwhelm.

• being proactive with financial reviews. Don't review financials when a bond's needed, schedule regular check-ins.

Now they know better, so they'll do better.

Educate contractors on why

Contractors sit in the dark.

Most don't understand the direct link between timely financials and their bonding capacity. Help them see how Sureties use financials to assess risk, and set limits. Delays will cost a contractor bids.

Best they learn the importance.

You've offered your contractors a set of standardized documents (you setting expectations).

Now, show them how these documents have a set format for the Surety. You've shared it, now ask them to use it. With today's integrated world (systems, formulas, AI), you need standards.

Consistency starts with repeatable templates.

Give tools to support them

Now they understand the why, give them tools to help.

Use technology.

Secure portals, shared drives, or specialized bond management software will allow your contractors to easily upload financials.

Reducing your dependence on email fixes version control, improves security, and saves time.

Hire a qualified CPA.

Connect your contractors with specialized construction CPAs. Firms that understand surety needs. Your contractors will love you for it.

Who's a good boy?

Praise good behaviour with subtle incentives for consistent, on-time submissions. It's not always feasible, but it highlights that proactive work leads to a smoother process for the broker.

Tools will shape the contractor and broker process. Invest in them.

Struggling to Get Timely Financials? You're Not Alone.

Financials are the most important contractor check-in for a broker.

Outdated financials are annoying, but they might be even worse. Like the still eyes of a lurking alligator. Full of risk.

Here's why financials are tough to get:

1. You kinda suck at communication

2. Contractors are skating around bad news

3. Construction financials can be a tangled mess

Let's look deeper.

1. You kinda suck at communication

Little communication leads to contractors trying their best.

No communication leads to contractors making fatal assumptions.

Sometimes it's the most simple communication that brings the biggest difference. Share the financial story because:

• Contractors don't grasp how current financials impact maintaining (or increasing) bonding capacity.

• Contractors don't understand the details (or even the format) that Sureties need from you.

• Contractors need to know about broker deadlines and submission needs.

It's not an administrative burden. Current financials is a priority for their business.

Communicate early, and the understanding will follow.

2. Contractors are skating around bad news

A lit candle is a fire to watch. A burning house needs Engine House 6. Don't wait until it's too late.

People naturally avoid negative information. It's the ostrich effect. A cognitive bias.

Most contractors hate to expose bad news.

• Your contractor might be operating on fumes. They think, if I wait one more week to submit financials, I'll have more cash.

• A contractor looks polished on the outside, but is an empty shell on the inside. Declining profitability or strained working capital haunts them. Stalling until the financials look better.

• Their internal cost tracking is a shoebox of papers. Costs are tracked, but their system's an awful example of organized. The accountant's ready to work, but the raw data is littered across worksites.

Having updated financials starts with the contractor.

Watch for difficult truths.

3. Construction financials can be a tangled mess

If understanding finances is an A team in the minors, understanding construction finances is the BIG leagues.

Job costing, percentage of completion, work on hand, all add to slow reporting.

Contractors (especially smaller ones) likely have an internal bookkeeper that works three other jobs at the company. From day one, they're overwhelmed. Add the complexity of construction accounting and files are delayed.

There's an opposite problem when contractors use external accountants. Now, everything's organized (finally!), but they dictate the schedule. Turnaround is less in the hands of your contractor.

Financials are a critical piece of the puzzle for assessing bondability, managing risk, and projects move smoothly.

Communicate early, break down bigger tasks, give contractors a template to follow. This'll speed up timelines and make your lives in the brokerhood much better.

The Subtle Art of Educating Your Contractor on Financial Transparency

A contractor's path to a healthy, growing firm is transparent financials.

Whether their financials are terrible 🫣, mediocre 😏, or perfect 🤩, they need to be clear, consistent, and comprehensive.

From your first meeting, sit down with your contractor and remind them that being transparent is the only way to win. The benefits to openness are endless. When contractors do this, it:

1. Builds trust with sureties

2. Scales bonding capacity

3. Speeds up delivery

Unlock options and fortify the surety triad. Here's why.

1. Builds trust with sureties

Losing someone's trust stings.

Losing trust with your surety ends your business.

Providing clear, consistent, comprehensive financials signals:

• the contractor's reliable

• the contractor's likely committed to sound business practices

• the contractor wants to foster a stronger, more collaborative relationship with a broker

Trust is the lifeline to business.

Building it rewards a contractor with better terms. Think, better rates and less restrictive conditions. Now, you're reducing project costs and improving overall profitability.

For project owners, this best-in-show ribbon is a key differentiator when owners and general contractors are evaluating potential partners.

Build trust, grow BIG.

2. Scales bonding capacity

A small bonding capacity hurts operationally and brings financial challenges.

A shrinking bonding capacity is crushing. Less work, a smaller competitive edge, and tighter bond terms. It's gutting.

Transparent, well-presented financials with strong working capital and a healthy net worth will:

• bring larger bond limits

• give a contractor access to bigger projects

• be the gateway to more profitable projects

Clean financials also builds trust with banks and other lenders. This leads to better credit lines, more favourable loan terms, and better banking relationships. All, critical for a contractor's working capital and growth.

Show up better, lengthen the leash.

3. Speeds up delivery

Slower reviews mean missed project bids.

Lack of clarity means more questions. Confusion. Now come the questions needed to plaster in any gaps. The pressure builds as deadlines creep.

Clear, consistent, and comprehensive financial data lets a contractor:

• meet tight bid deadlines

• reduce the back and forth between a broker, contractor, and surety

A readied approach allows for timely adjustments, mitigation strategies, and helps prevent minor issues from spawning into major issues later.

Nobody wants to jeopardize a project or the bond.

With transparent financials, a contractor can start making strategic decisions about growth, market expansion, and new areas of investment.

When tenders are aggressive, bid times limited, and project terms compacted. A contractor needs quick turnarounds.

Broker's are a contractor's coach. Love them with good data.

The Power of a Standardized Document Checklist for Every Surety Client

You loathe walking to your desk each morning because tracking a slew of contractor documents, emails, and a mess of financials is the worst part of your day. What have you received? What do you ask for? What's missing? Contract surety is complex. Not everybody's cutout to do it.

Make life easier. Build a standardized document checklist. Because it:

1. Brings a complete surety file

2. Lets you show your value, while reducing administration

3. Develops a repeatable process for new contractors, producers, and executives alike

It's systems that win the day. Here's why.

1. Brings a complete surety file

You can't make important decisions when you don't have a full picture of a contractor. A standard checklist provides you trust that you have a complete surety file.

This:

• Ferrets out all important documents. Financial statements, shareholder details, a clear view into their WIP. Missing items delay (or jeopardize) a bond application.

• Reduces errors and omissions. You sniff out inconsistencies.

• Allows you to spot early red flags. See problem areas in a contractor's financial health or operational practices. It gives you permission to help mitigate bonding problems.

• Keeps you audit-ready. A complete file means you have the right documents.

Measure your surety file against a checklist. You'll love feeling complete.

2. Lets you show your value, while reducing administration

Having a complete contractor profile speeds up delivery. Now, you get to bring value. The part of your job you love.

• Contractors want brokers that build their capacity. Someone to guide them in new pursuits.

• A checklist streamlines the onboarding process. Contractors now have a clear picture of what's needed. Less confusion, and limited back and forths.

• Underwriting becomes faster for bond request. Fewer questions, means contractors secure projects without delays.

• Less administration in your day. Move from bland data collection to vital strategic analysis. Advising your contractors, helping them improve bondability, and growing their capacity.

You're their water wings in a pool of uncertainty.

3. Develops a repeatable process for new contractors, producers, and executives alike

There's a clear picture of what's expected. Contractor's see your professionalism, and the credibility you bring. An organized broker grows trust. Trust = being a competent partner.

A checklist allows every team member to follow the same process. These become best practices for collecting documents. It never matters what office a contractor's working with or what team member answers the call. The process is the same.

Consistency reduces training time, improves collaboration, and reminds your contractors of your high service standards, regardless of who's handling the account.

Contractors choose predictable. A standardized document checklist makes working with you predictable.

Build one today.

The Hidden Cost of a Disorganized Surety File

Canadian contractors will be fully ramped up in the coming weeks. Roads built, foundations poured, and exteriors finished. The result of a strong contractor and smart bonding.

Regrettably, some contractors won't be working because of a disorganized surety file.

A disorganized surety file leads to:

1. Missed project wins for your contractor

2. Broken trust with your contractor, or Surety

3. Wasted time hunting for lost information

Chaos is a bad look. Don't become the broker that companies aren't going to work with.

Let's look deeper.

1. Missed project wins for your contractor

You thought you had time to issue that bond, but just learned you didn't. Your relationship is crushed with a single deadline. It was a long chain of mistakes. Emails requesting more information. Outdated documents. Too many spreadsheets with WIP details.

When you're disorganized, you impact a contractor's bonding capacity.

• It's important to know when a bond should be closed or considered lost. The contractor wants this capacity for their next pursuit.

• How do you see a compelling financial narrative when your contractor spreadsheets, financials, and documents are scattered in email or across file servers? How do you grow their bonding timetable when you can't connect the dots? A broker needs to be confident in their contractor's financial health.

Your surety file can't perform like an advent calendar. Each door bringing a new surprise 📦. Get organized or watch your book of clients dissolve.

2. Broken trust with your contractor, or Surety

Your contractor's periodic financial review breeds exhaustion. You miss a critical detail. Profit's sliding. Challenges with their WIP. A flip in financial ratios. Disorganization takes it's toll, and adds risk.

• In a regulated world, compliance is key. An audit, non-compliance issue, or legal problem, means you want strong files.

• How do you assess a risk profile without a connected history? You must trust your understanding of their surety file to advise on improving bondability.

• Contractors need brokers to assist with bonding. Delays, denials, or repeated asks for the same information frustrates a contractor.

Trust is earned. Keep it.

3. Wasted time hunting for lost information

Einstein stated, "Insanity is doing the same thing over and over and expecting different results."

Think of the hours your team spends searching, copying and pasting, ransacking emails for details. All you want is a clear picture of your contractor and the trend that got them here.

Bid deadlines, last minute couriers, emergency phone calls to satisfy a decision to bond, all add stress. You hate the thought of asking your contractor to resend.

Scouring filing systems, Sharepoint sites, and Teams threads hurts your brain. Your administrative costs are high.

Recover your time, redeploy hours into building relationships.