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Teaming Up With Accountants For New Clients: A Trickle Or A Steady Flow?

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Arthur A. Bavelas

Accountants provide many exceptional opportunities for life insurance professionals to generate significant production. One of the very best of these opportunities is for new life insurance clients.

From where we sit, most producers are only getting a trickle of new clients from accountants. Most of this is in the form of a few client referrals and, increasingly, some (but not much) joint work with accountants. The vast majority of producers are merely generating cases now and again instead of creating for themselves a steady flow of highly profitable (and pre-qualified) clients for life insurance.

Based on our field experience and a comprehensive data warehouse, we know that producers who are working effectively with accountants are reaping the rewards of having a pipeline of highly profitable pre-qualified cases for life insurance.

Getting this steady stream has taken some work on the part of the producer, specifically:

1. A detailed understanding of the business model being employed by the CPA firm in question.

2. A methodology for identifying meaningful life insurance cases.

3. A coordinated process for implementation.

Let us now consider each of these three components for creating a pipeline of pre-qualified clients for life insurance from accountants.

Understanding the Accountants Business Model. All accountants are not alike, and all accountancy practices are not alike. There are vast differences in the business models of accountants. These differences can arise from a number of factors: the array of services a CPA firm provides, the nature of its clientele, their perspective on life insurance, and the way they prefer to be compensated.

The first step in creating the kind of relationship that generates a steady flow of client referrals is to master the business model of the accounting firm that is being targeted.

In order to do this, producers will need to learn as much as they can about the specific ways that the accounting firm operates. Even more important, producers must learn to detect the critical “inflexion points” that most producers, as well as carrier executives, fail to capitalize on.

The compensation issue, for instance, is very much a moving target and requires the producer to continually be attuned to how a CPA firm is dealing with this matter. According to our research, about 20% of accountants are already being compensated with fees and commissions. The same research indicated that this number is likely to grow to about 50% over the next few years.

Compensation is an inflexion point for many accounting practices, and producers need to be aware of the way the accountants with whom they are dealing are being compensated now and in the future.

Another inflexion point can be the nature and mix of the CPA firms clientele. Our research shows that few producers have an in-depth understanding of the characteristics of the CPA firms clientele. We have seen this oversight lead to many producers wasting their time and effort with the “wrong” CPA firms. Since time is one of the resources in scarcest supply, it is essential for producers to select high potential accounting firms to focus on.

There are a number of ways to develop the requisite understanding of the business models of CPA firms. They all require time and effort. However, this investment of time and effort is likely to be well rewarded.

A producer talking to the “right” CPA firms is likely to get a case now and again, but far from a steady flow or pipeline of pre-qualified life insurance clients. For that steady flow, it is essential for a producer to implement a methodology for determining which of the accountants clients the producer should be seeing.

A Methodology for Identifying Life Insurance Cases. There is a strong bias in the life insurance industry to “educate” accountants on life insurance products, strategies and concepts. Very often, the approach is to bring in an attorney from the advanced planning department of an insurance company to give a seminar to accountants. These days, this approach is largely ineffectual. Our research shows that there are very rarely any cases after such a meeting, and we have tracked up to four months after such a meeting.

The reason the educational approach is ineffectual is that very few accountants want to be producers (which is why they do not want to be taught the mechanics of life insurance). Moreover, this educational approach, even on a one-to-one basis, does not create a lot of leverage for the producer or for the accountant.

For the educational model to work, the accountants have to remember the strategy or idea with which they were presented, connect it to the needs of a particular client, and then get the producer involved. While this sequence of activities does occasionally happen, it does not happen very often. This approach generates a trickle of clients at best.

As we have seen, this educational approach is not very productive, and for that reason, it is in some decline. It is also fading because the entire industry has become cautious about stepping into gray areas or there is too much reliance on “proprietary strategies.”

So what is next?

What is next is a shift from the product pushing of the educational model to strategic partnerships. Strategic partnerships take into account two facts: (1) accountants do want to serve their clients in the best way they can, and (2) accountants do appreciate that one solution is life insurance.

The linchpin of the strategic partnership model is creating enough trust between accountant and producer for them to systematically analyze key cases. The producers who have already developed a pipeline of clients in this way say their most valuable tool–the most efficient way to identifying significant life insurance cases–is a process known as strategic scenario sessions.

In such sessions, the accountant and producer work together–sometimes with the assistance of a facilitator–to strategize about the CPA firms existing clientele and the people and businesses they are prospecting. In these sessions, a well-structured and systematic game plan is constructed for each client or prospect.

Very often a modified version of the Whole Client ModelTM is used to uncover advanced planning and life insurance opportunities. When it comes to prospects, the strategic scenario sessions tend to focus on what solutions to offer and how to present them. The search is for the ideas, strategies or concepts that are likely to strike the right chord. Strategic scenario sessions result in numerous client and prospect advanced planning and life insurance opportunities being identified.

A Coordinated Process for Implementation. Having identified very good cases to work on, the accountant and producer must open, work and close the cases. In facilitating this marketing process, we have found that almost on a case-by-case basis there are differences in the collaborative arrangements between the accountant and the producer.

Some accountants are very comfortable letting the producer take the lead at appropriate times, while other accountants will never even let a producer directly see their clients. What proves to be the norm is that there is no norm.

Nevertheless, there is a strong need for a basic working arrangement to emerge that suits both parties. It is essential that the producer and accountant become very comfortable in how information moves around and that both are assured that the focus is on how to best serve the accountants clients.

In any sensitive relationship, the best way of working together will emerge. Producers and accountants will become sensitized to each others information and control preferences. Producers should also expect that these relationships will have to be recalibrated once a client is actively involved. Ultimately, the way the coordination process will effectively work will be a function of the working styles of the advisors and, most importantly, the preferences of each client.

The traditional model for working with accounts to obtain new client referrals has been the educational model centered on increasing awareness of new product-based solutions. For years, this model has been successful in generating client referrals, albeit only a trickle. Now, however, we are taking a second look at this model and finding that an alternative is much more attractive.

The new alternative is the one anchored by strategic scenario sessions, in which the accountant and producer sit on the same side of the table considering what is best in specific client situations. For this to happen, producers need to narrow their focus and concentrate on just a few accounting firms that they know as well as they know their own operations. This includes a close and intimate understanding of the accounting firms business model, including the critical inflexion points.

Enough producers are already doing this so we know the results–a steady flow, a pipeline, of clients.

Russ Alan Prince (right) is principal of Prince & Associates, a research and consulting firm in Shelton, Conn. He can be reached via e-mail at [email protected]. Arthur Bavelas is president and CEO of Resource Network LTD, Radnor, Pa. He can be reached at [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 18, 2002. Copyright 2002 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.