Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

How to gain clients through CPAs

Your article was successfully shared with the contacts you provided.

Many financial advisors cite CPA referrals as among the easiest to sell and the most affluent. Yet getting a CPA to make a referral is often difficult. Attorneys are likely to refer, yet only 33 percent of the referrals they make end up booking appointments with the financial advisor. Meanwhile, 62 percent of CPA referrals usually end up selecting the advisor they were referred to. One reason for this is that attorneys recommend three possible financial advisor choices, while CPAs recommend only one. The problem with getting more referrals from CPAs is that they are not comfortable making referrals.

Why are they uncomfortable? Five reasons:

  1. They are afraid of losing their client if the referral goes wrong.
  2. They simply don’t know how to make the referral effectively.
  3. They don’t know how to describe you to the client because they don’t know what differentiates you from other financial advisors.
  4. They think of you like many other brokers and advisors — those who make a commission and don’t maintain a relationship with the client. But CPAs do like independent producers that use conservative strategies that make sense for their clients. They just don’t know any that use conservative strategies.
  5. They often already know two or three brokers, and use that as an excuse not entertain any others. But this is just an excuse since they don’t even refer to them.

Yet CPAs often have the same three goals as you. They want to gain more affluent clients. The key goals of a CPA are:

  1. They want to grow their practice through service offerings, but don’t know how to sell them.
  2. They don’t want to lose their clients, but they don’t have any systems that create loyalty.
  3. They want more affluent clients yet don’t want any lower-level tax return work.

Here are two techniques to get high-quality, affluent referrals from CPAs:

  1. Get the names of your clients’ CPAs. It’s better to market to a lot of CPAs than get rejected by one and stop. Never depend on only one CPA to give you referrals. Whenever you meet with a new prospect, or even an existing client, ask who their CPA is. Tell the client you may be able to save them time and expense spent on their taxes if you can make contact with the CPA.
  2. At some point, call the CPA and let them know that you share a common client. Seventy-five percent of the time, they will be more than happy to meet and discuss your mutual client. At that point you can also mention what you do and how it will benefit their clients.

Learn about their practice. Talk about the probability of a client staying loyal with multiple products. Also talk about their initiatives in building their practice. Don’t pitch a referral arrangement. They need to be comfortable with you first before they will refer.