Research Cracks the CPA Referral Code

Research Cracks the CPA Referral Code

Elite advisors have invested the time, energy and resources to develop relationships with their COIs in a manner that is much different from that of the general population of financial advisors.

“CPAs don’t give referrals,” said Harold, a grizzled veteran of 32 years in the stockbroker-financial advisor-client trenches. He blurted this out during the Q & A period following my keynote about our latest affluent research, which highlighted personal introductions and referral alliances as the top methods by which today’s affluent discovered their financial advisor.

Trying to be gentle, there were over 100 financial advisors plus management in the audience, I replied, “I hear that refrain a lot.”  Then I asked for a show of hands for those who agreed with Harold.  It was an awkward moment.  It seemed as though nobody fully agreed with Harold, but many held a similar opinion.  This was confirmed when I asked for a show of hands of those who would like “more referrals from COIs – CPAs and the like.”  All hands went up.

At this point I asked the group if they wanted to use the remainder of their Q & A time for me to share our latest data on COIs and referrals.  It was unanimous, so using findings from our recent 2016 Elite Advisor research, I highlighted financial advisors who received 5 or more referrals from COIs in 2015 in direct contrast to those who received none.

As I explained to the audience, the overriding factor is that elite advisors have invested the time, energy and resources to develop relationships with their COIs in a manner that is much different from that of the general population of financial advisors.

These are the five questions I posed to the group, answer them as you continue to read…

How many of you have socialized with your COIs last year?

Maybe 35-40% of the hands were raised, but not with a lot of assurance.    

Who has sent a small gift to a COI last year?

About half of the raised hands were lowered.  Apparently not many were activating the power of “surprise and delight” with these potential referral alliance partners.  There were a lot of blank faces.

Who had a COI to their office last year and showcased their wealth management process?

It looked like less than 15% of the hands were raised.

Who knows their COIs “very well” personally (spouse, children, pets, hobbies, etc.)?

Very few hands were raised.

Who has sent 10 or more referrals to their COIs last year?

Very few hands were raised.

 

Cracking the CPA Referral Code

I then flashed on the screen the following….

The difference in activity between advisors who received 5 or more referrals and those who received is illustrated clearly in this graphic.  And before everyone could begin to feel too glum about their CPA relationships, I explained that they were viewing an “affluent client acquisition accelerator” -- the CPA referral code.  Every advisor in the audience, like every advisor reading this article, is fully capable of activating this referral code – even Harold.

The requirements were simple, but not easy.  When these same five questions are asked next year, and you are able to answer affirmatively to each – you’ll have most likely “cracked the CPA referral code” and accelerated your growth through acquiring affluent clients. 

As you can see from the chart, the differences between financial advisors who received 5 or more referrals from COIs in 2015 and those who received none are quite visible.  So, what’s the first step in cracking your CPA referral code?

First, assess your relationship with the CPAs of your top 25 clients and current referral alliance partners.  Second, select one CPA of your top 25 clients and invite both spouses to dinner.  Third, send a small thank you gift to another CPA of your top 25 clients in appreciation of the good tax work done for a mutual client.  And finally, invite one CPA to your office so you can walk them through your wealth management process -- showcase your professionalism.

This will get the ball rolling.  Remember, the more proactively you address the five areas outlined above, the more likely you are to crack your CPA code.

 

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com

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