CPA's and Referrals

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Apr 8, 2009 10:18 am

My partners and I have a number of relationships with CPA's and tax people.  Some of these relationships are long standing and some are actually personal.  We get along great with these folks.


One of our CPAs stopped by this morning, as he was in the building, just to say hi.  We chatted with him a bit about the current tax season, how it was going, yada yada yada.
 
We have only received a few referrals from him throughout the years (we've known and worked with him for about 10 years now).  Today, I asked him about referrals. 
 
He said, "I haven't had one client this tax season ask me for a referral to a financial advisor."  I said, "Why not?"
 
He says, "they're all spooked about the market".
 
I say, "Well, do they have a recovery strategy in place?  What are they actively doing to correct the situation?  Do they need a second opinion on their portfolios?  Hiding under the covers doesn't improve their situation."
 
He stares back at me blankly.  It's clear that they are not proactively asking the right questions to their clients... even after we've trained them to do it in a non-salesy and comfortable way.
 
I cannot, for the life of me, figure out what motivates these guys.  It's not money - tried that.  We've done a great job for every referral we've ever had from these tax people, so its not that they are afraid we will ruin their relationship with their clients.  They just seem extremely reluctant to provide a referral or introduction...  and I can't figure out why.
 
Any thoughts?  What works for you guys with CPA's?
Apr 8, 2009 10:37 am

I use a sheet that summarizes a list of life changes that I can help with:

Retiring soon or recently retired, recent inheritance, sale of a significant asset, new births, etc.
 
I email or fax at the beginning of tax season as a reminder of how I can add value to their practice.
 
Many CPA's are leery of liability for the referral so I show them a letter that is given to the client stating my recommendations are not those of the CPA, etc.
 
Stok
Apr 8, 2009 8:39 pm

I use the same thing, we have a very simple placemat-like sheet that works well for communicating what we can do. 

 
I have also found, they may refer you a smaller client first.  It has happened to me.  Give them the full package you would to someone with $250M or more.  Get them comfortable with how you do business.  Involve them a little bit, if that is their desire. 
 
I think the CPA who said "everyone is spooked" is blowing smoke up your butt.  Bull.   But, I am not sure of how easy it is to call BS on them.  Besides, a lot of them try to do the same thing now--hold business retirement plans, personal assets, etc.  If I come across prospects where the CPA does their IRAs or business retirement plan, I usually just let them go.  There are exceptions, for ex. some clients of mine, their CPA has the business ret. plan, because their old FA didn't ask them about it.  What I do is, ask for copies of statements, and then provide suggestions to them on how to improve it.  Gently.  But, I tell them, ask "CPA" if this is available, or this.  Probability is, the CPA won't have the time to become an expert on those things as you have. 
 
I have found a couple that don't do that; had lunch with a few, will probably send them something this week or next-sandwiches, something for the office that will help them out and hopefully keep me fresh in their mind.   
 
 
Apr 8, 2009 9:57 pm
etj4588:
Any thoughts?  What works for you guys with CPA's?
 
I grow weary of ANY CPA that has time to stop by your office to chat 1 week before taxes are due.
Apr 8, 2009 10:58 pm
Ominous:
etj4588:
Any thoughts?  What works for you guys with CPA's?
 
I grow weary of ANY CPA that has time to stop by your office to chat 1 week before taxes are due.



He was 10 minutes early for an appointment with a client that has an office in our building.

Apr 8, 2009 11:01 pm
C_FA:
a lot of them try to do the same thing now--hold business retirement plans, personal assets, etc.  If I come across prospects where the CPA does their IRAs or business retirement plan,



This guy does not do any of that stuff... know it for a fact.

Apr 9, 2009 12:05 am

"I cannot, for the life of me, figure out what motivates these guys.  It's not money - tried that."
 
It is money.    He is referring business.  He is referring it to clients who are financial advisors.  He is referring it to people who refer business to him.   He is referring it to his financial advisor.  He is referring it to his boss's kid.  Where do you fit on this totem pool? 

Apr 9, 2009 10:44 am
anonymous:

"I cannot, for the life of me, figure out what motivates these guys.  It's not money - tried that."
 
It is money.    He is referring business.  He is referring it to clients who are financial advisors.  He is referring it to people who refer business to him.   He is referring it to his financial advisor.  He is referring it to his boss's kid.  Where do you fit on this totem pool? 



We do refer business to him.  His boss does not have a kid in the business.  He is simply not referring clients and I can't understand why.  He is waiting for people to explicitly ask if he knows a financial advisor that can help with their investments... only no one this season has asked.
 
Can't quite figure out whats important to him or what will get him off his *ss and start asking his clients questions.
 
Apr 9, 2009 12:53 pm
etj4588:
Can't quite figure out whats important to him or what will get him off his *ss and start asking his clients questions.
 
 
People are motivated usually by one of two things...
 
1) Money- you can't get something for nothing
2) Reputation, Ego, Self Worth etc. - the reaction from the community when someone gets the help they need
 
You said number one is out (but probably not completely). Then you look at #2. Find a way you can help his clients and make it look like he is the one responsible for it. Tug at his emotions and how much people need someone that they can at least ask questions without being bombarded with sales pitches. If the CPA thinks you are after 1) Money then he will be hesitant to refer business. From what he has already said to you, a door has slightly opened. Stop by a visit him every Friday and ask about the week and if anyone he worked with that week or in the upcoming week would like to come to a Q&A seminar that you will be hosting.
 
People helping people, it's a beautiful thing...
 
 
Apr 9, 2009 1:15 pm
etj4588:
anonymous:

"I cannot, for the life of me, figure out what motivates these guys.  It's not money - tried that."
 
It is money.    He is referring business.  He is referring it to clients who are financial advisors.  He is referring it to people who refer business to him.   He is referring it to his financial advisor.  He is referring it to his boss's kid.  Where do you fit on this totem pool? 



We do refer business to him.  His boss does not have a kid in the business.  He is simply not referring clients and I can't understand why.  He is waiting for people to explicitly ask if he knows a financial advisor that can help with their investments... only no one this season has asked.
 
Can't quite figure out whats important to him or what will get him off his *ss and start asking his clients questions.
 
 
You are referring business to him.  He's not referring business to you.  He makes money from you.  You make nothing from him.  He has no reason to refer business to you.  Let him know that the referrals will stop unless he becomes a personal client of yours or he sends business your way.  As things currently stand, there is zero reason for him to send business to you instead of to others.
 
If I refer business to a CPA and they are not a client and don't send business to me, they are never getting a second referral.
Apr 9, 2009 1:52 pm
anonymous:
etj4588:
anonymous:

"I cannot, for the life of me, figure out what motivates these guys. It's not money - tried that."



It is money.    He is referring business. He is referring it to clients who are financial advisors. He is referring it to people who refer business to him. He is referring it to his financial advisor. He is referring it to his boss's kid. Where do you fit on this totem pool?





We do refer business to him. His boss does not have a kid in the business. He is simply not referring clients and I can't understand why. He is waiting for people to explicitly ask if he knows a financial advisor that can help with their investments... only no one this season has asked.



Can't quite figure out whats important to him or what will get him off his *ss and start asking his clients questions.



You are referring business to him. He's not referring business to you. He makes money from you. You make nothing from him. He has no reason to refer business to you. Let him know that the referrals will stop unless he becomes a personal client of yours or he sends business your way. As things currently stand, there is zero reason for him to send business to you instead of to others.



If I refer business to a CPA and they are not a client and don't send business to me, they are never getting a second referral.





Agree 100%

Apr 9, 2009 3:52 pm

I agree 100% as well.  As someone who works with a lot of CPA's I would be curious to know how exactly you are positioning yourself.  In other words what makes you different then ABC advisor down the hall at LPL, the RIA across the street, and the Morgan Stanley office across the street.  CPA's refer a lot of business but you need to have a very clear process and they need to know exactly how you can either help their business or help their clients.

Apr 9, 2009 8:57 pm
DodgerDraftpick:

I agree 100% as well.  As someone who works with a lot of CPA's I would be curious to know how exactly you are positioning yourself.  In other words what makes you different then ABC advisor down the hall at LPL, the RIA across the street, and the Morgan Stanley office across the street.  CPA's refer a lot of business but you need to have a very clear process and they need to know exactly how you can either help their business or help their clients.



He believes in us.  We have shown him our process throughout the years.  For the handful of referrals he has given us, we have done right by those clients and even cemented his relationship with them.

He just doesn't refer on a consistant basis.  What I'm looking for is some ideas on what we can do to improve the number of his referrals.

Should we hold a client appreciation event for him?  We pay for dinner, do a quick market update, and get introduced to his clients?

Apr 9, 2009 9:49 pm

"He believes in us."


 
Is he your client?  If not, there is someone whom he believes in more.
Apr 9, 2009 10:09 pm
anonymous:


Is he your client?  If not, there is someone whom he believes in more.



He is a client of ours.  See why I'm frustrated?

Apr 9, 2009 11:17 pm

etj - he just sounds selfish.  he's only thinking about his business.  not yours.  he's also probably lazy and not quite proactive.

Apr 10, 2009 6:57 am

"He is a client of ours.  See why I'm frustrated?"


 
Yes.  You just need to realize that some people aren't comfortable giving referrals.    When that is the case, no matter what you do, you probably won't get much in the way of referrals.  With that being the case, I would stop referring business to him, but I wouldn't say anything to him about it since he's your client.
Apr 13, 2009 1:56 pm

When you say he's a client of ours do you mean  of  you or someone else in the firm?  Also are you Indy, Regional, how many years in the biz etc.  Next what his his practice like?  Busienss owner clients, corporate execs.  I need more information before I can give you some more specific advice.

Apr 13, 2009 4:48 pm

Here's a recommendation:

Take pizzas to your CPAs tomorrow or Wednesday, they will appreciate it.
Apr 13, 2009 5:53 pm
DodgerDraftpick:

When you say he's a client of ours do you mean  of  you or someone else in the firm?  Also are you Indy, Regional, how many years in the biz etc.  Next what his his practice like?  Busienss owner clients, corporate execs.  I need more information before I can give you some more specific advice.



He is a client of one of our team partners - but we've all known him for years and years.  We are recently Indy, came from a regional wire.  Our team's junior member is LOS 9, the senior member LOS 25.

His practice consists of individuals.  Not necessarily business owners (though some may be) or corp. execs (though some may be).  Most have investment accounts at ML, SB, etc..