Three Secret Ways Advisors Start a New CPA Referral Relationship

There are three ways that you, a financial advisor, can get CPAs to refer new clients to you. You might be thinking that you’ve tried this already and it didn’t work; maybe you’ve referred lots of clients to different CPAs and they never returned the favor. If that’s happened to you, read on to get a few ideas on how to actually create relationships with CPAs that work. I’ll also share how to initiate conversations with CPAs and get them comfortable with referring clients to you.

I have a sneak peek into how CPAs think, and what they think about advisors, because I started out in a CPA firm. I did taxes for about five years at the beginning of my career before making the transition to becoming a full-time advisor. During that time, I got pitched by dozens of financial advisors so I know what most are doing, what makes some stand out, and I know the few that CPAs like most.

How to Stand Out to CPAs

Since every other advisor is vying for CPAs’ attention, to really stand out you have to understand the biggest problems that CPAs face that you can solve. You have to be able to make their lives easier. If you can do that during tax season, there’s a much greater chance that they’re going to want to talk to you after tax season.

When I used to get pitched by advisors, they would walk in and focus on themselves. They’d tell me about the great work that they do, how they help their clients, or about their big firm. But the ones that stood out were the ones who focused on me, the CPA, and how to make my life easier, while also helping the clients.

Here are the top three problems that CPAs have and how you can help solve them:

1) Having to Explain Negative Tax Consequences

CPAs often have to explain negative tax consequences that result from decisions their clients made, or that their advisors helped them make, in the previous year. It is a common experience for CPAs to have to break bad news to their clients due to an investment decision that they had nothing to do with. Nobody likes being the bearer of bad news and CPAs have to do this all the time. If we can simply keep our CPAs in the loop on financial things happening throughout the year, this allows the CPA to chime in and to take note of it, and even recommend possible changes for the client. Clients love it when you can take this team approach, including the CPA, advisor, and them in decisions. Really, the client just wants to be out of the middle.

2) Wasted Time Due to Missing Tax Forms

Another big problem facing CPAs is the time that’s wasted going back and forth with their clients regarding missing tax forms. Clients sometimes miss submitting a tax document, or maybe they never received it in the mail. Half the time, CPAs end up going back and forth via email or over the phone to talk about that missing info. And a lot of the time, the client needs to go back to the advisor to locate the missing form. Again, this puts the client as the middleman, or middlewoman, which is a position they don’t want to be in. But what if we could make both our clients’ and the CPAs’ lives easier? Usually at the beginning of every tax season, our advisory firm will send a reminder email to our best clients and their CPAs, letting them know of the accounts from which they can expect a tax form, and then we'll get authorization from our clients to talk to the CPAs directly. This has saved both the client and the CPA so much time each tax season.

3) Missing Cost-Basis of Older Investments

Sometimes during tax season, while a CPA is working on the clients’ tax return, they see a zero-cost basis on the 1099. When they call the client to ask about it, the client has no idea. Thus begins the time-consuming process of trying to figure out what the basis is and often the client ends up having to pay way more to the government than they have to. This happens because when the CPA talks to the advisor, the advisor blows off the question, claiming that the client held this account long before they started working together so they don’t care to do the legwork to determine the cost. Then the CPA has to guess at the amount and the client pays more tax than is really necessary.

Side note: if you don’t know the cost basis of an older holding, try using a hypothetical model. For example, we use Morningstar to give pretty accurate numbers as to what the cost basis could be.

Starting a CPA Relationship

If you’re serious about starting a CPA relationship, you need to start communicating with your clients’ CPA more often during tax season and throughout the year. They’ll start to see your value; that you care about your clients and that you’re actually making life easier for the clients and for them. That’s just step one, but it’s important to show that you’re making their life easier, not causing more problems or blowing them off when you could be helping.

Once you’ve established your value, you can begin the process of taking it a step deeper with that CPA. I have done this a lot and I know the right words to say and the things to do to move the relationship from the beginning stages to one where the CPA looks to you and actually trusts you. Once you get to this point, it leads to more referrals for you. And to make this easy for you, I created a PDF guide to creating CPA relationships. Click here to access it.


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