Targeting CPAs for referrals requires careful approach

It's as much give as take in these valuable relationships.
MAR 04, 2014
Advisers looking to build relationships with accounting professionals should take a deliberate approach and recognize that right now — as certified public accountants are gearing up for their busiest days of tax season — is probably not the ideal time to request a first meeting. Instead, advisers should reach out to the CPAs they already know in the early months of the year to offer assistance, such as providing cost-basis information for client investments, said Wendi Webb, director of adviser and client marketing programs for Horsesmouth, a firm that provides education and support services to advisory firms. Looking for more ways to use CPAs to attract new business? Check out Paul Saganey's blog As April 15 nears, some advisers send lunch over to the offices of the CPAs with whom they work, Ms. Webb said. One adviser sponsors a “Thank God it's Over” party for CPAs on April 16. “CPAs are a great source of possible referrals, but it's difficult to form a good working relationship with them,” Ms. Webb said. “The best way is to be a valuable resource for them.” Some accountants are leery about recommending an adviser for fear they won't perform well for the client or otherwise “blow up” the relationship between the client and the CPA, Ms. Webb said. David Johnson, an adviser with Signature Estate & Investment Advisors, said garnering referrals from CPAs has been a challenge for his practice, and typically takes years to cultivate those relationships. "The inherent risk involved with the investment piece of our business makes CPAs nervous," he said. Related: 7 things advisers should do after a referral But it's important for advisers interested in building their practices to try to overcome accountants' reluctance to offer recommendations. The fastest-growing advisory firms are pulling in 3.5 times as many new assets from professional referrals as the median, according to the 2013 benchmarking study from The Charles Schwab Corp. In fact, the high-growth firms are earning more referrals from their centers of influence (network of associated professionals) than the other firms get from all referral channels combined, the study found. Helen Modly, an adviser with Focus Wealth Management, said she hosts “Lunch and Learns” in accountants' offices twice a year — in May and October to avoid tax season. She sticks to topics they are hungry to learn more about and can get continuing education credits for, such as investing basics and inherited retirement plans. With every new client, Ms. Modly asks about their CPA and tries to set up a coffee with that person. Regardless of whether she gets a personal meeting, she adds them to a distribution list to receive a quarterly communication she sends to all her centers of influence. Ms. Modly recently sent out a “Second Opinion” brochure aimed at helping CPAs when their clients ask them to evaluate whether their investments are performing well. She offers to provide a portfolio review for the CPAs' clients for free, without even knowing the clients' names, just in case the accountant fears Ms. Modly may be looking for a way to poach those clients. The CPA can share the report with the client, creating extra value for the accountant's client relationship. She has provided about five or six “second opinions,” and has already received referrals from the CPAs to whom she's provided them, Ms. Modly said. “We look for ways of making ourselves a resource for them; we don't ask for referrals,” she said. “We try to work with them as a team — and the referrals just naturally flow.”

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