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Principal Helps Agents And CPAs Form Alliances

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Principal Helps Agents And CPAs Form Alliances


After years of attempting to work with certified public accountants, Al Hogan says that doing so through Principal Financial Group has been the most successful method hes tried yet.

Hogan, a Myrtle Beach, S.C., insurance agent, says he hasnt seen “anybody make the CPA market work really well. They havent made it a successful part of their practice yet. [Principal is] closer than a lot in helping [insurance agents] do that.”

The program is based on the idea that CPAs are “natural gatekeepers” to clients Principal would like add to its roster, says Michael Beer, CPA and vice president of Individual Markets for Principal.

The relationship is mutually beneficial, according to Beer, because many CPAs have long been trying to gain entry into sales of financial products. The marketing program is designed to match CPAs with agents who will help them achieve the financial strategy they want to implement for their clients.

“Thats something of value we think we can provide to CPAs,” Beer says. “A lot of times the CPA wants to work with an expert in some of the services they know they need for their clients, [and] working with CPAs directly adds value to us.”

Hogan agrees, pointing out that for clients in a professional market, “the accountant is the number one advisor.” Because accountants have clients who own or run growing businesses, the size of the premiums for their financial services needs tends to be much higher than that of the average client, Hogan says.

He estimates that cases “would be 20% to 30% larger for an agent working with a CPA. You dont need a CPA to sell to mom and pop at the kitchen table.”

Hogan has been working with CPAs through Principal for about 10 years. But it wasnt until 1999 that Principals work with CPAs was formalized into the CPA alliance program.

A CPA can work with Principal through the program in one of three ways: on a referral basis, a joint work basis, or independently.

On a referral or joint work basis, either the CPA or the Principal Financial Group finds the client, discovers the clients needs, analyzes her needs, identifies strategies, performs a client presentation, implements the strategy and performs an annual review. When a CPA works independently, he performs all those steps on his own.

CPAs who refer clients to Principal are paid a fee, Beer says, but most CPAs work with Principal marketers, and typically, the two professionals informally refer clients to each other.

A CPA who is a licensed representative with Principal and works on joint cases shares the commission generated with Principal, according to Beer.

The alliance program includes 13 continuing professional education seminars for CPAs on topics ranging from estate planning to tax tips that can be helpful to their clients, Beer says.

Principal also has “hubs of expertise” called Principal Resource Centers “out in the communities where CPAs can work with us,” he adds.

Because much of the business is based on informal referrals, its tough to know how much work is actually done with CPAs, Beer says. But, “we estimate that over 10% of our life insurance policies written have some affiliation with CPAs, via informal referral or from CPAs licensed with Principal.”

“I think there are an awful lot of agents that have tried to [form an alliance with CPAs] on their own and failed,” Hogan says. Principal, he adds, “is starting to put all the pieces together.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 27, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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