My CPA Won't Refer and Now His Son Is My Competition

Welcome to Day 2 of our Referral Clinic and Blog-a-thon!  We asked advisors to send us their toughest referral challenges. Now we're featuring the 20 best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by George M., who's with a regional firm in St. Louis, Missouri.  Nice job, George!

Daryl Logullo, founder of Strategic Impact, will be answering George's question. Daryl helps advisors attract more clients using direct response, strategic alliances, and client referral strategies.

Question: "I have a CPA that has done my taxes for over 20 years. During that period, I have given him an average of 1 or 2 referrals a year. Many of them have become his clients. He gave me one, some time ago. This tax time when I dropped off my records, I noticed that one of his sons, just graduated from college, has set up a co-located office with him and is affiliated with one of the 'independent' broker-dealer networks. I commented on this and was told, 'We have so many clients that need this service, we decided to get into it ourselves.' 

Over the years my contacts with other CPAs have gone nowhere when they learned I wasn't interested in giving them my tax business.  This seems to be part of the price you pay in my market. So I kind of have all my eggs in one basket.  What do I do now?"

Daryl Logullo's answer: The short answer is, you move forward! Besides trust, referral alliances love one thing: consistent momentum. Sounds like you're feeling paralyzed.

First, the son.

Attempt to forge a relationship. Be genuine and honest. Protocols may include a further introduction made on behalf of the father; an invitation by you to provide advice on a prospect of client proposal you are working on; even inviting him to participate in one of your quarterly client meetings. Bottom line: move forward! With or without the old man.

You can also do the same with other CPAs in the marketplace.

I do want to comment on the twenty years of knowing and trusting the 'father CPA' since that sounds like a regrettable point to you. There is a semblance of a relationship there. At the very least, the CPA knows your skill set. But are you certain that during those 20 years he has experienced all of your work? Does he truly understand all of your competencies?

If so, use that to your advantage; if not, there's hope. But it requires an open, honest conversation about core competencies. It involves you "bringing" the CPA into your monthly world of financial advice and counsel. The examples I gave above can help.

Now: how to go about moving forward. Please understand that in many instances referrals from CPAs tend to deal with seasonality factors (among other things). I write about this in Chapter 13 of my book.

CPAs often run a cyclical and seasonal business. Yet, if you have a good relationship with the CPA (or any professional for that matter), I firmly believe you should be able to sit down, face to face, and confidentially, tactfully say, "I understand that there is a lot of timing involved here—and I've sent you some clients through the months—but tell me:  Are you seeing any situations now that may be a good fit for me?"

Asking that question isn't pushy, domineering, or aggressive. It's acceptable business behavior between valued professionals.

Just realize that in all likelihood the CPA may have a narrow picture of what you want from him. In your example, sounds like you've always dropped off tax info. Maybe that's all he knows your needs to be: Using him for tax prep!

Clearly define what the circumstances are that would be right for the CPA to contact you.

Can you think of such situations?

I can. For example, maybe he should contact you whenever he faces a question concerning a lump sum retirement plan distribution for a client. Or whenever there is a  family inheritance issue for a client. Or whenever a client wants to convert her UGMA account to a 529 plan.  You get the idea. I refer to these "life cycle events,"  or L.C.E.s. Detail what L.C.E.'s warrant a phone call to you. Be specific!

Often, written tools such as a Client Profile or an Ideal Client Picture help to communicate this. Those are great tools that every advisor should be using.  Remember: referral alliances love consistent momentum. Start creating some and watch what happens. Good luck!

Got questions or thoughts about today's challenge or Daryl's response? Post a comment.

Comments

[Maureen]

Of course this situation presented a surprise. I see alot of learning opportunity.

1. The CPA did not notify his tax clients of his son's strategic alliance with his practice. Otherwise George M would not have encountered this "surprise!"

This leads into my observations of CPA's--they tend to be task oriented, lack business systems, and as a result cannot see the forest through the trees.

This CPA didn't even think to help his son out by sending a blanket form letter letting his clients know of this "father son team" to create the Hallmark moment marketers dream of. If he doesn't think to help his son out, how can George M ever think this CPA would help him???

2. A criteria for referrals should not be whether a planner has their taxes done by them.

I've had my CPA for 15 years, I know he refers business to other financial advisors he counts as clients. That is the nature of where he is, who he is, and the culture. I accept this, and I don't care, because I need to get my taxes done. I refer business to him that is high level, because he won't drop the ball and has a multitude of experience working with a wide range of achievers.

This casual comment should be irrelevant to this discussion.

3. Building relationships and a team of players in our communities. This takes time and effort and consistency. I get referrals every so often from CPA's because we go to coffee, do breakfast, etc. I remind them of what I do and build excitement and enthusiasm when we are meeting. However, during tax season it is their objective to get returns done, not look for referral opportunity.

To keep on their radar screen, I take on the role as a resource when it comes to various IRA rules and such. I give information without the expectation that I have to get a referral.

It takes time, you have to click, it takes consistency. I frankly feel developing CPA's as a major referral source to fill one's pipeline is a waste of time. The same goes for estate planning attorneys. Another topic for another day.

[Robert N]

His son is in the biz. Have another CPA do your taxes or have three or four do them each year. You will now have a relationship with each of these professionals to build on. His son is in the biz......

[Frank Condon]

What did you as a Financial Advisor do to justify receiving referrals through the years? Just because you gave him your tax return to do means nothing. He may do 20 FA returns and give no referrals. You never proved your value or worth to him. In addition, I would question his character if he is referring to a young recent college grad (even if it is his son) investing his clients assets. Maybe it's time to break the tie and look to start a fresh relationship with a more professional CPA. In my experience with accountants, this would be someone I would move away from. He is what other accountants call a "kitchen-table" accountant. They never break out of that mold and may not even have quality relationships to refer to you.

[Monte Resnick]

As a former sales manager / coach in the medical device industry, I observed many similar situations where a representative had great rapport with a surgeon - perhaps even golfed with them once a month. However in the operating room, the same surgeon consistently used the competitor's product. What was missing from the relationship was a genuine understanding of the value the representative offered to the surgeon's life / practice. Become a resource to cpa's and other professionals who work with wealthy clients and you will begin to receive the rewards of great referrals. Stop "telling" and begin asking thought provoking questions. Want to see how most advisors come accross? Just sit down with the next wholesaler who walks through your door with the same glossy collateral charting how well they've done compared to the index... I make lots of time for wholesalers who become my own personal advisors by sharing best practices and stories from other professionals they've worked with. Yes, cpa's want new business, but a confluence of knowledge and ideas are presents which exist at a much higher level - and will differentiate you at the same time. Good Selling!

[Katherine Vessenes]

Daryl--I have a slight disagreement with you here. I think this is a losing situation. As a friend of mine says, mark and move on. It looks like Dad needed to find work for the son.

There is one thing I would do before moving on--meet with Dad and tell him you need some advice about your business. During that lunch you would start the conversation recalling how long the two of you have worked together. Tell him you would really like to understand the mindset of CPAs better. That in that entire time you only received a few referrals. Then state: "If you were me, what could I do to get more referrals from CPAs like you?" Then shut up. Dad should give you your entire marketing campaign.

I think the best thing you can get is good information on how to do better with CPAs and that could make this a very worthwhile relationship and well worth the 20 years you have invested.