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9 Things to Talk About When Accountants Suggest a Change in Advisors

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For more articles about practice management, from experts who’ve actually had to manage practices, see Your Best Self.)

What’s a financial advisor’s worst nightmare?

The list is long, but towards the top is the accountant who suggests to their client at tax time they might consider shopping around for a new advisor to help with insurance, investments and retirement planning.

What have they done for you lately? Why do you stay with them?

Accountants like that sow doubt about the relationship.

What now?

The Accountant’s Side of the Story

The accountant probably wants to help a client by suggesting ways the client can save money or improve the client’s tax situation in the coming year.

(Related: 4 Ways to Create a Sense of Urgency)

The accountant might look at the investment return the client received, along with fees paid and say: “Do you know how much you made last year? Do you know what it cost you in fees and commissions to get that return?”

The accountant might be thinking of investing as a transactional relationship. What are you paying for what you got?

As a fiduciary, the accountant is in a position to offer unbiased advice, especially if the accountant is telling the client to shop around.

If the accountant doesn’t get feedback about how you are adding value, the accountant might be suggesting the client check out robo advisors. If the accountant is also in the business of providing investment advice and wants that business, that’s an exception to the fiduciary relationship.

The Advisor’s Side of the Story

The first thought that should occur to you is “Maybe I should make more of an effort to be introduced to my client’s accountants.” In this scenario, it’s too late for that. You need to focus on justifying your value.

Let’s assume you have been doing a fine job and are a model financial advisor. You anticipate issues and keep things running smoothly. “It’s amazing the amount of work it takes to make something look effortless.”

You’ve heard about the swan, looking serene above the surface while paddling furiously below.

You need to tell that story.

1. The big picture

The relationship is built around financial planning. You know their dreams and what’s important to them. You are helping them plan for their children’s education, that vacation home in the mountains or the sailboat they dream about.

2. Retirement

You’ve seen the statistics. So have they. A large number of Americans are inadequately prepared for retirement. You help them by suggesting they max out their contributions to workplace based retirement plans, take advantage of retirement savings allowed through their second job and investing spare cash in tax deferred retirement vehicles.

3. Progress reports

You and they focus quarterly on how they have been doing relative to their goals. Everyone wants to beat the stock market, but not everyone wants or needs to take an excessive amount of risk in the process. Their long term goals might only need modest returns.

4. Accountability

These performance reviews are similar to report cards. If they take your advice, then you are holding yourself accountable. They can fire you if they feel you are doing a bad job.

5. Pay as you go

If you are utilizing fee based platforms, the client is paying for the service only for the time they are using it. High upfront fees and stiff surrender charges are so 1980’s.

6. Objective advice

Offering fee-based pricing, at least as an option, puts you and the client both on the same side of the table. Together you evaluate the performance of the managers you hired. More important, you are helping them act, not react. Sudden declines in the market may get them thinking of selling everything. You help make the case why they should look at the long term picture. This might be when they should be buying, not selling.

7. Frequency of contact

You keep in touch to learn if their circumstances have changed. Have they been promoted? Is another baby on the way? Has their firm announced layoffs? These possible developments effect their financial planning.

8. Help for the family

Your conversations aren’t limited to them and their money. They ask about how they can help their adult children. Their parents live on a fixed income. You are generous with your advice. What starts as free advice can often lead to business.

9. Estate planning

One way they might help the next generation is leaving them money when your client’s time is up. This might involve life insurance or more complex estate planning. You can help them get the advice they need.

The Unexpected Upside

Next you ask: “What other advice did your accountant provide?”

This probably includes saving more for retirement, earning tax free interest where possible and taking full advantage of college savings plans.

Haven’t you been making these same suggestions to your client for months? Years? Now you have third party reinforcement. Perhaps now your client will take action. Not by firing you, but by taking your advice.

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Bryce Sanders is president of Perceptive Business Solutions Inc.  He provides HNW client acquisition training for the financial services industry.  His book, “Captivating the Wealthy Investor” can be found on Amazon.