The average CPA firm services over 800 clients each year. Typically, advisors want to build relationships with a CPA with the hope of being introduced to those clients. But the reality is, most of these relationships produce less than 10 introductions each year (yes, really). Is it worth the time you invest into that relationship for just a handful of introductions each year?
What if you could get more than that? It’s possible. You just have to get a little creative.
Typically, the approach that financial advisors take in their relationships with CPAs is modeled after what worked once upon a time for someone else. Unfortunately, given the growing adversity among both advisors and tax professionals, what worked for someone else, with someone else, sometime long ago, likely will not work for you.
One of the most powerful ways to enhance your relationships with CPAs is to understand the character traits generally seen in those drawn to the accounting field and how they can potentially get in the way of the CPA/Financial Advisor relationship. Let’s explore:
- CPAs are rarely proactive. The “referral” method relies on the CPA to proactively think of their clients in order to recommend the best qualified candidates for a meeting with you, their advisor partner. Most CPAs are conditioned and have decades of experience, working reactively. They are used to being “historians” – recording the previous year’s activity for their clients. They rarely take the opportunity to do future planning, and honestly, most CPAs simply lack the time to do it. The 10 referrals per year we mentioned earlier generally come when a client specifically requests help with financial services. When asked, CPAs will happily make an introduction, but getting the clients to ask may be a challenge. If your partnering strategy relies on the CPA suddenly becoming proactive, it may be doomed from the start.
- Providing referrals is a lot of work. CPAs rarely have enough time to take on additional, non-billable work. Tax pros get paid based on the amount of time allocated to work with a client. Additional time spent developing their business, meeting with you, and contacting their clients about additional services they may need from you, is viewed as non-billable time. Since every minute of the day represents revenue, they may see this time as a loss in profits.
- CPAs are typically not motivated by an offer to split commissions. The ability to remain unbiased and independent is a core value of accountants. CPAs often view referral compensation as potentially compromising to their objectivity. If your current relationship strategy includes motivating your partner with the promise of lucrative bonuses and commissions, you may find your target partner repelled by your proposal.
- CPAs fear losing their “most trusted advisor” Similar to the issue with motivating through commissions, CPAs fear deep down, that if they endorse an advisors recommendations, they will lose their credibility or their trust level will become diminished. Remember, in a traditional referral strategy, you are asking the CPA to do something completely different then they have done before. It is far easier (and safer) to reject something new then to risk negative consequences they fear.
Now you may be asking yourself: With all of these obstacles, how are there any successful CPA/Advisor relationships?
Many of the most successful relationships we’ve noticed come about due to sheer luck, atypical CPA personality types, or deeper personal relationships before beginning a professional relationship.
If you don’t want to spend decades looking for these unusual circumstances – maybe it’s time to try a different approach. Instead of looking to change the natural tendencies of CPAs, learn to harness the advantages of them.
If your current model requires the CPA to suddenly develop a skill in proactive planning, chances are it isn’t going to work in your favor. Knowing this, you, the advisor, can use your own skills in proactive planning to develop that part of the relationship.
Help your CPA partners to get paid by the client for the extra time you need them to spend in order to create a connection. Most advisors are more skilled in sales than CPAs. Put those skills to work and strengthen your partnership by assisting with that conversation before the time is even spent.
Help your partner see that by bringing in additional specialists to the team, they will be seen as an even more trusted advisor. Communicate to the CPA the benefits and deepening relationships that can grow as a result of adding more specialists to the team. Remind them that not making that referral could actually hurt them in the long run. One person cannot be an expert in all things and by refusing to make that referral, the CPA could be keeping their clients away from the best solutions out there.
Finally, find out what really motivates your CPA partner. Don’t assume he or she is interested in sharing commissions. Building a true connection and active listening skills can help cue you in on ways you can offer support and value to your new partner. This way you can find out what they really want, and put yourself in a position to provide it.