Financial Advisor Blog on Marketing, Lead Generation, Prospecting and Sales

People who like to spout opinions as facts plague our industry and so we hear so much about the activities of CPAs as financial advisors. Well the truth is it ain’t happening.

In three conversations with major financial institutions that recruit CPAs to be financial advisors, approximately 90% of those CPAs do less then $50,000 gross commissions a year. I used to do that much production in 2 weeks when I was a full time financial advisor.

So what went wrong?

There are three barriers that will continue to keep CPAs low producers:

1. They don’t like to sell and they do not know what selling is. CPAs think that selling is convincing people to do something they may not want to do—like what happens on a used car lot. And that’s uncomfortable for your average introvert. The fact is, selling is the science of asking appropriately timed questions to have the prospect realize the right solutions for themselves. The master salesperson can say very little and through the mastery of powerful soul-searching questions, can have any prospect see what financial changes should be made to reach their goals. But that description of selling is many levels beyond the average interaction capability of most CPAs.

2. Accountants do not like uncertainty. For the average accountant, the IRS code provides a security blanket. The rules are black and white and knowing the rules are considered fulfillment of the position. The securities markets are fickle. Investors can lose money. There are no rules to insure an adequate return. This uncertainty is many light years from the comfort of filling in little boxes on a tax return. Additionally, financial services are a whole new intimidating body of information to be mastered. It’s like shoving a halogen flashlight down a mole’s hole—very unsettling and causes a scampering away from the light.

3. Success in financial services is about getting “messy” with people. You have to get involved in their emotions, their hopes and dreams and regrets. You have to deal with people in times of death, divorce and catastrophic illness. They may even start crying. Many CPAs would find such behavior quite unsettling as they attempt to maintain the cold indifference of a professional. Financial advising is a contact sport, better suited for a psychology major than finance major. This entire emotional arena is quite off-putting to someone originally attracted to the cloaking of eyeshades and the formidable insulation provided by oversized ledgers.

There are in fact many successful CPAs in financial services, but these are not the average practitioners. The successful practices I hear about are:

1. Organized as fee-based financial advisory practices. The CPAs have registered as RIAs and manage client finances themselves or through a 3rd party money manager. Most, if not all of their business, is form existing clients from their CPA practice.

2. Have staff dedicated to marketing. They do client seminars, they call clients and set individual appointments and they even ask for referrals.

3. Run by entrepreneurs who know that the IRS code is not black and white and fails to give guidance in serious tax matters, that there is indeed creativity in accounting. That accounting advice and financial advice are both inexact sciences based on probabilities.

4. Run by CPAs who have long been getting involved in the emotional mess of their clients’ lives.
But these accountant entrepreneurs are the minority. They have and will continue to seize the day and take market share from existing financial advisors. But these practitioners are a small minority of the CPA body.

Thus, for most CPAs and financial advisors, it might be best to form alliances and each realize that they have a particular expertise, body of knowledge and a particular comfort zone. I cannot think of a better match than a CPA who refers to his financial advisor colleague the business of financial advising and the financial advisor who refers the intricate issues of taxation and calculation to the CPA. What a beautiful marriage if they would stop being so suspicious of each other.

Most sole practitioners or small CPA firms would do well to join their local FPA chapter, meet the local advisors and find a comfortable alliance relationship to pursue.