Should I Build My Own Tax Practice?

Almost every advisor I know that’s ever tried building their business by opening a tax practice did so with the following false belief. “If I prepare the client’s taxes, I’ll become the trusted advisor, then they will have the same level of trust they have in me as they do in their current CPA.”

Here’s the flaw with that logic. To assume that preparing the tax return makes the CPA the most trusted advisor is a fatal error. In my experience, it’s not preparing the tax return that gives the CPA so much credibility. It’s the amount of time the CPA spends building trust with clients. CPAs have by default a built-in trust development process. CPAs have to meet with their clients each year and must gain access to all of their personal financial information, and as a result, the clients get comfortable working with them, and over time their trust is earned. 

If you decide to start your own tax practice as a means of prospecting, understand you are going to have to prepare your clients’ taxes for probably three to four years before you come even close to having the same level of trust with them that they currently have in their CPA. 

The reality is, the power behind working with CPAs is in leveraging your time. You simply cannot afford to build your business the old-fashioned way, one client at a time. As a strategic advisor, you need to think smarter and understand that it’s possible to gain the trust of hundreds of potential clients all at once, if you simply start at the top. 

Starting with the clients’ most trusted advisor, (the CPA in this example), and having that CPA transfer the trust their clients have in them to you is the key. You should be working alongside CPAs, positioned as the go-to advisor for their firms. You need to be introduced to their clients as the expert, and as a resource for their practice in the areas of planning in which you are the expert. Let’s face it, opening a tax practice is really more of a potential liability than it is a good prospecting strategy.

In reality, you need CPAs. And while the CPAs may not realize it yet, they need you as well. You need to leverage the trust they have with their clients, and they need you to provide services their clients are looking for that they don’t specialize in. It’s this team approach to planning that’s the key ingredient to unlocking relationships with the high-net-worth clients you want to work with. But first, you need CPAs to introduce you.

So how do you go about forming these relationships and getting these introductions? How do you identify the best candidates for a strategic alliance? And how do you differentiate yourself from all of the other advisors in your market vying for each CPA’s attention? By approaching CPAs with a true value proposition, in which they win, you win, and ultimately their clients win. 

In the coming weeks, I’m going to reveal the most strategic methods being used by advisors today to form these profitable relationships. Until then, check out www.WinningWithCPAs.com for more helpful information and articles.