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To get CPAs to like you, there’s no more powerful tool than empathy. Here’s what is going on in the mind of the CPA when you approach them to be a source of referrals.
They worry about fee compression
Sound familiar?
Yes, just like advisors, the CPA business model is facing stiff competition from new technology. Just as you have roboadvisors, they have TurboTax®. Just as you are feeling the pinch on your margins from automated tools that threaten your very existence, their audit and tax return margins are under fire as well.
Sounds like match made in heaven. Well, at least it theoretically could be. Approach the CPA with the understanding that your success with him or her will be predicated upon your ability to offer them a way to fight fee compression by helping them deliver higher level services. Do this while helping yourself at the same time, of course!
Remember that cliché that all of you have plastered all over your websites about how you love putting the client’s interest before your own? Same applies here. Yet I constantly hear and see examples of advisors who treat CPAs like there’s some tit-for-tat relationship where they’re expected to be the ones to pay it forward.
Don’t be another pitchbook-pushing advisor!
Be an advocate – one who sees their troubles in life and has the solution. Example: here’s how to find your client’s missing cost basis for the position he bought 18 years ago that’s threatening to force you to declare an extension on this year’s tax return.
They could use some sales guidance
Ahem, did that slip?
There I go with my opinions again, but you knew that when you clicked on this article. The truth is that the typical accountant tends to embody some or all of these characteristics:
- Data-focused
- Logical rather than emotional
- Risk averse
- Skeptical
- Reticent
- Precise
All these characteristics are what make affluent people love them. They aren’t exactly the swing-from-the-chandelier, life-of-the-party type (like some of you advisors are), however. Very few of them have had any sales training.
Pitch? Close? Follow up? Remember how these were foreign terms to you before you went through the Merrill Edge training program? Write them a blog on it and explain.
It’s no wonder that navigating the challenges of developing new business isn’t the first thing on their list. Guide them to a better way to perform in the sales process and they’ll be thanking you later for more cash coming in the door.
Past versus future
Think about the nature of what an accountant does and where it falls in the client’s decision making process. Much of their work has to do with evaluating results after the fact (audits, valuations) rather than projecting an outcome that is not clear (e.g. business tax credit strategy).
In other words, the work they do tends to involve post-mortem analysis rather than planning or strategy planning.
Help the CPA to get into a position of higher influence in the client’s financial planning process by elucidating matters such as SEP IRA paperwork (this is written in Swahili, by the way), what to do about a bad market before one happens, what to do when you discover you have a special needs child, etc.
Their business is transactional
CPAs are busy during tax season with transactional business. After they collect, the client disappears until next February.
Remember when you first started out as a fee-only advisor? How daunting was the notion of waking up every month starting at zero recurring revenue (and you’ve got bills to pay). Now understand how they feel from May to December.
Find ways to increase their business so they feel like it’s as busy as Tax Day every day.
Leading with empathy
To ally with a CPA, lead them to a place where:
- They can execute higher paying services such as business tax advisory
- They enjoy a more stable revenue stream as a result
- Their margins expand
- They create new opportunities to serve existing clients
- They are led to opportunities to create relationship with new clients and guided through the process by someone who is a trained salesperson
- They gain more confidence and certainty in their ability to control the sales process
How do you as an advisor lead them there? I covered some practical ways and spell them out in a webinar I recent gave here on AP. Check out the replay here and let me know what you think.
Sara Grillo, CFA, is a top financial writer with a focus on marketing and branding for investment management, financial planning, and RIA firms. Prior to launching her own firm, she was a financial advisor and worked at Lehman Brothers. Sara graduated from Harvard with a degree in English literature and has an MBA from NYU Stern in quantitative finance.
Read more articles by Sara Grillo
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
