CPA Referrals

It’s real simple…share revenue, and/or send referrals, get referrals

Thanks for the response Indyone.

I'll be a bit more specific regarding my own work with accountants and hope that I get more replies this time.  I just finished my 4th year and have about 30 million AUM, with nearly all of it coming through referrals from accountants.  I never did any cold calling of potential clients and I would not have made it this far had that been the only possible prospecting method.

The thing with accountants is that they frequently view brokers as lazy, dishonest and not very bright.   These may be unfair stereotypes, but they exist among many CPAs.  I work to overcome these issues by positioning myself as a person that is honest, reliable and technically strong.

Now I know that other folks on this board must have had success with this method of prospecting and I'd to hear what has worked and what hasn't worked.   I have never done any revenue sharing, thought I do give referrals when possible.

"The thing with accountants is that they frequently view brokers as lazy, dishonest and not very bright."

Funny, that's how I see most CPAs. Especially the ones that simply plug their clients into Turbo Tax while charging sky-high fees and then call me because they can't understand a simple 1099.

I Know I may be missing out, but…I can’t stomach most Accountants or lawyers. They have a know it all presence about them. Has this group been prospected to death??? I mean if I personally knew some local attorneys and CPA’s maybe there would be a chance at doing business, but to prospect new relations…Is this working for anyone??

Over 24 years I have tried just about everything to prospect CPAs and Attorneys.  Currently, I send two different newsletters to each every month.  I do this just to keep my face and name in front of them.  Next, I target specific CPAs and Attorneys by referring clients to them.  First I will call the attorney and say, “Bob, I have a client who needs a revocable living trust, would you mind if I referred them to you?” Then I go to the appointment with the client and the attorney.  The same process works with accountants.  This has gradually increased my referrals over the years.

My firm works with a few estate attorneys - they are awesome but we’ve
had a relationship going back 30 years.  I started doing some work
with a few other attorney’s and I eventually just had to walk away from
it.  The ego, talking behind my back with the client, constantly
questioning my recommendation - I couldn’t do it anymore.



CPAs have always had a nice niche.  They just rarely recommend an
advisor and now are getting to be our competition.  I took the EA
exam, passed and now handle taxes for my larger clients.  If they
reach certain AUM, they get free tax prep!  It’s brought in some
rather large clients and kept a few I was afraid might be getting ready
to leave for a major firm.  I know tax work isn’t the type of
business most on here like to think about but for me it was a perfect
fit.  I was shocked how much in assets I wasn’t being told about.

Exactly my point!!! I really don’t like to be seen as pessimistic, I’m more of a realist , And I hate BS. We have wholesalers and managers comming in hear all the time talking up the “center of influence” speach. Really…Like Beagle said, CPA’s want our business, and Professionals (in my experience) are not crazy about sending referrals, especially to investment guys. I would not ignore a natural connection, but I don’t think I would spend a ton of time prospecting ESQ’s and CPA’s.

[quote=Proton]

Thanks for the response Indyone.

I'll be a bit more specific regarding my own work with accountants and hope that I get more replies this time.  I just finished my 4th year and have about 30 million AUM, with nearly all of it coming through referrals from accountants.  I never did any cold calling of potential clients and I would not have made it this far had that been the only possible prospecting method.

Oh, ....and by the way, I was a general partner at the largest accounting firm in my area. (THAT.....is how that story usually pans out), cuz, no way, no how, are accountants going to just start sending referrals, (millions worth) to someone they don't know.

[quote=moneyadvisor]I Know I may be missing out, but…I can’t
stomach most Accountants or lawyers. They have a know it all presence
about them. Has this group been prospected to death??? I mean if I
personally knew some local attorneys and CPA’s maybe there would be a
chance at doing business, but to prospect new relations…Is this
working for anyone??[/quote]



You have to get a niche.  If you approach them with “I have good
asset allocation and financial planning…” you will get no
where. 



If you go and say “I work with wealthy farmers who are looking to keep
property in the family with no taxes, and of course those families that
did no such work and now need post motrtem planning.”  you will
get some action.

I have a few responses below:

Sniper - I have a client where the accountant misunderstood the reported interest on an OID bond this year.  Maybe this means the accountant is dumb and I'm smart (or the other way around) but I viewed this as an opportunity to help educate the CPA and build good will.  In fact, I told them to get me the CUSIP any time they have a concern about a bond and I will get more information.  This is the same firm that referred me into a business with a retirement plan that was about to be taken over by another brokerage firm.  I met with the business owner once and did a tekeover for a million-dollar plan. 

Moneyadvisor - you are exactly correct in that no CPA is going to send a referral to someone they barely know.  But, they are sending referrals to someone, so the question is how do you get to be that someone?  I personally started off by offering to do lots of CE for firms (this is a good hook because accountants need 40 hours per year, but make sure you know your firm's rules and the CE rules for your state) at their office.  I don't have time to do much of that any more, but our firm puts on a CE seminar every year.  We get a large crowd and about 40 of the attendees were there on my invitation last year.  I send fairly technical pieces (not fluff) about once a month on things like bond taxation rules and annual changes to retirement plans.  I do things like sponsor a golf outing for one firm every year, rent a suite for a basketball game for a different firm, etc.

Beagle - great idea about the tax returns, but there is zero chance that my firm would ever let us start doing 1040s.  My experience is that most accountants in our area really don't want to do anything with investment stuff, but I don't doubt that things are different in other areas.  This is partly a function of when a given state implemented the Uniform Accountancy Act.

For sure, this is not the prospecting route for everyone and it's fine if it won't work for you.  By the way, I've never really tried to work the connection with attorneys, which may be a mistake on my part.

I'm just trying to see what has or hasn't worked for people.  It's fine by me if you wish to express skepticism abd I would always advise a person to avoid a method that won't work for him or her.   I just have to believe that somebody else on this board has had success and I'd like to see what they've done.

"I have a client where the accountant misunderstood the reported interest on an OID bond this year.  Maybe this means the accountant is dumb and I'm smart (or the other way around) but I viewed this as an opportunity to help educate the CPA and build good will. "

It's a fine opportunity to build good will. Simply hide the fact that you now know he's dumber than dirt for not knowing something that basic. Then again, between just us folks, had did he screw it up? Did he not have the year end statement and the 1099?

"This is the same firm that referred me into a business with a retirement plan that was about to be taken over by another brokerage firm.  I met with the business owner once and did a tekeover for a million-dollar plan.  "

Very nice. You've picked our brains here from secrets, how about telling us how you managed to get the CPA firm to refer that to you. Was that before the guy stumbled on the OID bond?

I didn't give you any feedback to your original question, so here goes. I do CE classes for CPAs and I remind them whenever I get a chance how easy it is for them to work with my clients (and why more of their clients should be my clients) because I make sure they have and can understand the 1099s and end of year consolidated statements.

Sniper - as I think you know the CPA referral gig does not work for everyone.  However, it appears that you are also having success with this method and here are a few specifics:

1. My academic background and previous work history were in engineering.  This helps because the accountants know I can do the math and understand the concepts better than a former gym teacher that decided to become a broker.  I know this sounds arrogant but it is what it is.  I don't think this is a huge deal, but it helps.

2. As I mentioned, I did a lot of CE at the office of various firms.  I think the best approach is to do multiple sessions when possible over a period of several weeks.  A one-time presentation is better than nothing, but just barely.  Many firms have a particular time & day every week for staff meeting and/or CE.  This is not for everyone and you have to be comfortable in front of a group that may ask some pretty difficult questions.

3. I mail relatively technical pieces to accountants roughly every month.  I respond immediately every single time I get a query about a particular technical issue.

4. I bring things like food and coffee to firms during busy season.

5. I respond immediately every time I get a referral even if I won't make a dime because I know I will get the more lucrative referrals too.

The accountants get inundated with brokers that are trying to get business.  Believe it or not, I have never asked an accountant for a referral.  I take the approach that I am trying make their lives easier by acting as a resource to them and their clients.  These guys aren't stupid and they understand what I'm doing.

This is not an approach that will yield quick hits, which keeps many brokers away.

GREAT advice so far...  I have another question:

Lets say we're new to the business, and are hosting a CPA CE seminar.  Good for an hour of CE, breakfast, and some information.

Lets also assume, there are no prior CPA contacts. 

How would one go about filling this seminar, being that CPAs are already being prospected to death?

When I asked, one account told me to mail or fax an invitation, however in the past I've had little/no luck with mailing anything. 

Is mailing to CPAs different?

TIA!

es four – I think you will have a difficult time with the format you propose.  However, there may well be others with suggestions.

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The problem is that you are asking CPAs that don’t know you to drive to a venue for one hour of CPE.  This is not an efficient way for CPAs to get their hours and I think you might be better off with either a four hour event or with a one hour event at the CPA’s office.

Are you the speaker for the CPE?  If so, then just offer your services to various firms in your area.  If not, you may find the value of your event to be diminished because you really aren’t marketing yourself.

That being said, my experience is that most firms have a partner or manager that is at least informally responsible for lining up CPE.  Try to identify that person and cultivate a relationship with the goal of trying to make his or her life easier. 

Hello all !

Dito on the Lawyers n CPAs, gents !

Funny Thing happened at the Lawyers a short while Back:

the Dummy( i use the phrase as Compliment) thaught that Having attended some Bloody college or other and Not having learned a Thing about Sec Regs ( a Specialty not Taught) and I,never having Had the Displeasure of attending,Could not know the regs ! ( What a Maroon )

i Guess he didn't Realise that I was there to help Him and Not the Other way Round ! (should've held his Tongue )

Having had Similar Experiances with CPAs, my Thaughts on Both are Identicle to those of SHAKESPEAR !

       but i Think i'm Prohibited from Posting Profaneties !

my Best to you All !

Apparently, you are also prohibited from following basic grammar rules.  Nice examples of random capitalization, horrible spelling and poor punctuation. 

I REALLY hope that you are not out there representing investment professionals to CPAs and attorneys.  If you are and you communicate like this, please stop!  You are only making it harder for the rest of us.

When I read SanteeClause, I get this image of the Pizza delivery guy/ Architect in the movie "something about mary"

[quote=moneyadvisor]

When I read SanteeClause, I get this image of the Pizza delivery guy/ Architect in the movie "something about mary"

[/quote]

GO ROG!!!

CPA's,   I have worked ( and still do) in a couple of well established firms in my area. What I have found is they will not refer clients to wire houses or insurance agents! To many rookies. They only refer to CFP's that are Indy and have experience! That is at least how it is here. In fact I had one call me yesterday and he made the comment a new broker called him from Smith Barney and the CPA new this guy. He was selling cars last year! Now he is a financial expert!  As far as helping CPA;s out I work with them preparing taxes at night during tax season.

Santee - you need to go back to about the 3rd grade.  Horrific.



Yes I agree that the vast majority of firms won’t allow you to do
taxes.  That’s why I work at a small independent where I own part
of the firm.  I can do basically whatever I want as long as
compliance doesn’t throw a fit.  I also don’t have a complaint
against me, my firm or any of the advisors so the NASD doesn’t say much.