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Advisor Goes From 860 Clients to Zero, Makes More Money

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Anthony Lombardi went from 860 end clients down to … zero.

He shuns asset management. “There’s no money in it,” he says — typically just a percentage of assets under management — and besides, “it’s cumbersome and inefficient; you have to manage $100 million just to make a million bucks.”

And while Lombardi spoke with ThinkAdvisor on a Monday, he said he’s not planning on going into the office this week until Friday.

The Carlsbad, California-based advisor spends more time with his 9-year-old daughter, and surfing, than he used to back when he was managing all those cumbersome assets for his hundreds of clients.


To hear Lombardi tell it, he’s just living a more fulfilling life that leaves time for his faith, his family, helping other people and, importantly, making a lot more money than he used to.

So how do you make money as an advisor without the nagging details of managing investment assets for end clients?

Lombardi thinks he has cracked the code of the industry’s long sought but rarely realized aspiration of profitably collaborating with CPAs.

Rather than sweat over the pressing needs of 860 end clients, Lombardi says it’s much more profitable to make the CPA your primary client.

“You can make a million dollars off of one of the client’s end users in three months,” he says.

The founder of Perfect Client, which holds training sessions for other advisors who want to learn how to work with CPAs like his own advisory firm, the Lombardi Group, eschews the standard industry push toward fees.

“Everything we do, we make a commission off of.”

Instead of the standard fee-based investment plans, Lombardi more typically helps a CPA’s high-end client whose needs might range from a defined benefit plan to an employee stock ownership plan or a large insurance policy that will shield its owner from estate taxes. He’s doing one of those, a $14 million policy, for a CPA’s 50-year-old client right now that should generate a premium of $500,000 a year, resulting in a commission of about $400,000.

While most advisors, and many an industry coach, recognize the value of developing CPA referral relationships, Lombardi says most are destined to never see a meaningful CPA referral.

“They’ll throw you the bone of a C client,” he says. “If you really work it well, if you perform, [the CPA will say] ‘I’ll give you my B-minus client.’ There’s no money in that. There’s money in A clients, and you’re never going to see them — ever — no matter how good you think the referral relationship is.”

Lombardi learned the unique power of the CPA back when he was catering to his hundreds of former clients.

“I was working … with very wealthy individuals and found that anytime [we touched on a big decision] that was outside their comfort zone, the clients had to get the approval of guy they trusted most.

“As much as I hoped it was me, it wasn’t. It was their CPA. Then I had to have a stranger [vet] these decisions,” he recalls.

He concluded that “if I have to go there [eventually], why don’t I start there?”

So, like a lot of advisors, Lombardi started meeting with CPAs. That’s where he experienced the frustration of getting suboptimal referrals, and where he learned the limitations of the many advisor-oriented CPA alliance programs.

“Even the best CPA programs out there are all teaching referrals.”

But these all necessarily fail, Lombardi says, because they all boil down to getting a CPA to tell their clients: “I’m not good enough to take care of you — so here’s this other advisor.” 

And that explains why advisors working with CPAs don’t get their partner’s A clients.

“These [A clients] are worth hundreds of millions of dollars,” Lombardi says. “That translates into over $100,000 in fees to the CPA. They’re never going to take the risk of sending you those clients.”

It was that realization that caused him to rethink how advisors need to approach CPAs. It dawned on him that he needed to stop threatening to compromise the CPA’s relationship with his clients and instead enhance that relationship.

An advisor could accomplish that by making the CPA the advisor’s client and by helping the CPA address the problems and inefficiencies inherent in the CPA’s, or tax attorney’s, business model.

These tax professionals “are the hammer, but they don’t have a nail.”

Putting that nail to use means making it unambiguously clear to the CPA that it’s his nail. Most advisors show off their “tool kits” to CPAs, but Lombardi says they need to completely take themselves out of the equation and learn about the CPA’s needs.

Perfect Client trains advisors to first determine if there’s a match between the two professionals. For example, Lombardi’s practice focused on affluent business owners and wealthy families.

Second, the training session counsels advisors to verify that the CPA has trusted relationships with his clients.

The final step is convincing the CPA “that by working with someone like you, he can do it better.”

Making that case requires trust, trust is established through relationships, and relationships, Lombardi says, are restricted to the very few people one finds it worthwhile to invest a lot of time in.

That’s why Perfect Client’s process involves advisors integrating their practice with the CPA program over a 12-month period, during which the advisor does nothing without the CPA’s approval. It is always clear that the CPA is the primary advisor, and the investment advisor is just part of the CPA’s team.

“We become the go-to person for the go-to person,” Lombardi says. “When [the CPA] needs something, we meet with him; and only then do we present solutions to the end user; only then do we become entrenched with the end user.”

That process completely changes the dynamics between the investment advisor and the client, who, Lombardi says, will ask his CPA: “‘What do you think? Should I do it?’ Then the CPA says, ‘I think you should.’

“And that’s it,” Lombardi says. “There’s no selling, just solving.”

The barrier to advisors’ success is the perception they’re trying to sell things. The benefit of the advisor-CPA alliance is the focus on solutions, says Lombardi.

He adds that both advisors and CPAs end up “having it all” — higher income and more time to spend on the important things in life, like their families.

Scott Johnson, Perfect Client’s director of sales and marketing, says the firm trains between 30 and 40 advisors a year. The program, which they used to conduct as a three-day live event, is now conducted over 24 months in order to keep advisors “focused and accountable,” he says.

“We keep our training sessions small on purpose,” Johnson says. “It lets us get more interactive and personal with the advisors.”

Lombardi says about half of the advisors in his training program come from wirehouses, the other half from independent broker-dealers — one of which, he says, recently sought to buy his firm, an overture he rebuffed.

The difference between advisors and CPAs, Lombardi concludes, is that “what advisors are trying to do is sell the end user something to make money; the CPA, on the other hand, needs to take care of the end user to make money.”

Lombardi’s solution, in essence, is for the advisor to take care of the CPA.

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