According to recent statistics, there are upwards of 200,000 wirehouse and independent broker-dealer affiliated advisors and RIAs, and there are upwards of 400,000 CPAs. I like those odds. That means there is a wide arena of potential partnerships available to enterprising financial advisors.
This is hardly an original idea; the majority of financial advisors try hard to cultivate such relationships. They readily perceive the synergy between their own marketing-oriented businesses offering investment services and the narrower but more intimate relationships that CPAs have with clients bearing all in their income-tax statements.
It seems like the ultimate client-referral solution. Yet most financial advisors report frustration with the actual results. They see CPAs as tough nuts to crack, untrusting and overly protective of their relationships. Sound familiar?
This months’ cover story, “Building the CPA Alliance,” investigates the promise and pitfalls of CPA-advisor coalitions. As Ellen Uzelac reports, such alliances — even if cemented in a formal agreement — rarely get off the ground. Like most things that are worthwhile, they require time, effort and perseverance. Once firmly established, they live up to and beyond many an advisors’ most earnest aspirations.
I would venture to offer a few thoughts of my own on these relationships: The problem is that advisors and CPAs are two very different animals. (That’s why they are such a good match!) Advisors tend to be practical, results-oriented people; CPAs tend to be more process-driven: They fill out forms and check off little square boxes — lots of them.
An advisor may therefore try to wow a CPA with a happy ending: “It’ll be win-win.” “You’ll get a stream of referral fees.” Or, “I will hold seminars for your partners and clients.”