The Practice Doctor is IN

Al Depman, CLU, ChFC, CMFC, BH

Growing Your Business Through Advocates

Picture this:

You are sitting at your desk and the phone rings. It is Art Goebel, a CPA you have been keeping in touch with over the past couple of years:

“This is Art. I have a client, Chester Chase, who runs a small service company with 23 employees. I have been reviewing his personal tax return and balance sheet. He has about $12,000,000 in investable assets. I told him that you would be calling to give him some financial advice and I told him that he should do whatever you tell him.”

Calls like this one actually do happen, but they don’t happen by accident. Let’s take a deeper look at what’s behind this phone call. What are the underlying elements that have gone into Art’s referral?

• Art has an “A” client who has substantial assets.
• In Art’s opinion, Mr. Chase has not gotten the best advice on how to invest those assets.
• Art believes you can provide that “best” advice.
• Art has a strong relationship with Mr. Chase.
• Art trusts you enough that his relationship with Mr. Chase will not be affected in a negative way by this referral. 
• The referral is a win/win/win scenario because the results have a positive impact on each participant: you, Art, and Mr. Chase.

To put it in best practices parlance, Art is your advocate. Creating advocates, whether they are clients or centers of influence, is an important part of any client acquisition system. As the industry continues to change and move forward, advocates will become an increasingly important part of your business.

Let’s focus on developing centers of influence, specifically CPAs. A center of influence is anyone with influence in a network that you are interested in penetrating. They are willing to help you with introductions and insight into that network. Think about the network of an established CPA for a moment. How many clients and other professionals do they interact with that fit your Ideal profile? How many assets do you think that CPA has under tax management? What if you could find three CPAs who had $100,000,000 of assets under tax management who trusted you enough to recommend their clients to you? What would that be worth to you and the CPA? More importantly, how do you make it happen? How do you develop productive CPA relationships?

It’s not as difficult as you might think. Start with CPAs that you know or have as clients. Have a cup of coffee with them to learn more about what they do. Learn about their problems. Talk with them as one business owner to another. Learn about their strengths, weaknesses, opportunities, and threats (yes, the same SWOTs analysis we all learned in school). As a business owner it is likely that you have a great deal in common:

• The need for more clients that meet your criteria. They may have either too few clients or too many of the wrong kind.

• Concern about client attrition or client attraction. They may want to protect their relationship with their clients from the competition.

• Concern about their competition and the number of services available through other firms.

• Not enough focus on marketing.

Here are some ideas for things you should discuss when meeting with CPAs:

• Share your business plan with the CPA, and talk about the issues and concerns you have in common.

• Demonstrate that you have experience with the type of client they have and want.

• Have samples of your work. In particular, focus on your fact-finding (discovery) process. Demonstrate that you are client-centered, thorough, and knowledgeable.

• Stay focused on the CPA’s business; don’t give the impression that you are there solely to increase your business.

Networking with CPAs

After you have learned a little about the business from CPAs that you already know, start to approach other CPAs in your area. Do you know the other professionals in your building or building complex? If necessary, you can find them the old fashioned way––by looking them up in the Yellow Pages.  You can also go to www.cpadirectory.com.

Another way to get started is by contacting your best client’s CPA (with their permission, of course). It is a great way to connect with a CPA because you are talking with him/her about a mutual interest––your client. This meeting gives you an opportunity to demonstrate how good you are at what you do.  Before a CPA can refer you, he/she must trust you and value what you do. There is no better way to do this than by partnering with your client’s CPA. Ask your client to set up a breakfast or lunch meeting with the CPA.

Creating a Partnership

In a few cases you may be able to speak with a CPA about the possibility of working together and splitting business. In many situations CPAs have found that doing both tax and financial planning work is too time consuming and prevents him/her from doing either job well. The time it takes to be viewed as an investment expert as well as a tax expert may be another issue.

Check with your broker/dealer before you pursue this idea. There may be some restrictions with regard to splitting business. To avoid any possible conflict of interest issues, make sure that all of your dealings with the CPA and clients are fully transparent; this is especially important regarding how you are both going to be compensated.

Be Patient

Patience is required before you can get to the point where someone like Art can easily and confidently refer top clients to you. By some estimates, grooming a CPA to this level of confidence is a three-year journey. During that time, here are some ideas to keep the momentum going:

• Offer approved one-hour seminars that provide continuing education credit for the CPA.
• Share quarterly advanced marketing newsletters or market briefs that you have access to.
• Invite the CPA to business events or recreational outings sponsored by you, your firm, or your company.
• Set up a client teleconference with the CPA as the guest presenter. The topics may include tax planning for this year or common items overlooked by taxpayers.
• Add the CPA to your birthday and holiday card list.
• Be aware of any recognition the CPA receives in the media and acknowledge it.

There are no shortcuts to earning the trust of a CPA or other gatekeeper, such as an attorney. If you keep a strong, professional image, consistently demonstrate the value you can provide for their clients, and be persistent, eventually you’ll get a call like Art’s.

(Ed Howat, Jr. CLU, ChFC, LUTCF, RCC, President of Addie Woods Consulting, ed@addiewoods.com, contributed to this article.)

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. “The Practice Doctor”, is MitchAnthony.com’s Business Practice Consultant. He is the creator of “The Practice Management Assessment” tool and materials and has authored numerous articles in professional publications on practice management, and author of the forthcoming book, How to Build Your Financial Advisory Business, to be published by McGraw Hill in 2009. Al combined his Liberal Arts studies with 10 years of management experience with McDonald’s Corporation to enter the financial services world 25 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at al@mitchanthony.com.

© 2008 Al Depman