Many advisors are disappointed by the result of their efforts with CPAs. Part of this disappointment is due to the fact that many advisors aren’t following a proven process for developing CPA relationships. The other main reason advisors are disappointed is because they set unrealistic expectations about how CPA Alliances will work and how quickly they will yield results.

CPA Alliances are a long game, but many advisors try to play it like a short game and fumble as a result. To help advisors set more appropriate expectations, here is what we advise.

Don’t Rush The Process

I like to tell advisors, don’t go into the first CPA meeting expect to close the deal right away. I liken it to dating. You don’t go from “Hi, nice to meet you” straight to the altar on the first date. You need to take your time to get to know the CPA, to vet their business and their clients, and to allow them to do the same. Once you are comfortable with each other, you and the CPA can start to dip your toes in the water. You can try to work together on a few clients or have them send you a referral or two so they can see how you handle their clients and what service they receive. Over time they will trust you more. As they do, the relationship deepens, and they become more willing to send more clients and to work more closely together.

This is why we coach a deliberate and paced approach to the CPA marketplace. CPAs don’t want a hard sell. They want a trusted partner who shares their values and will take good care of their clients. It takes time to demonstrate the value you bring and to show the integrity and care with which you operate. Also, if you are dealing with solo CPAs or smaller firms, the process will take even more time as you are working with a practitioner who may not have strong business acumen. It takes more time for them to trust the process and to adopt new business methods. Patience and persistence is key in working with them.

Be Conservative With Projections

We see many programs promoting unrealistic numbers as far as referrals go. Although a CPA may have hundreds or even thousands of clients, you won’t have immediate access to all of them, nor will you instantly see CPAs refer hundreds of clients at once. Again, it takes time for them to trust you. So, they often start with one or two clients, then slowly increase form there. You also have to constantly teach them how to refer business to you. To better frame your expectations, below are some stats from our clients during their first-year pursuing CPA relationships.

As you can see, most advisors generate roughly 9 new clients from an average of 5 new CPA relationships in their first year. Over time and with intentional effort, that number will steadily grow. In 2019, our practice saw over 300 referrals from our 65+ relationships. It took several years to reach those numbers and not all of those referrals turned into clients. However, we received a higher number of in-segment referrals from our CPAs than from other sources, and those referrals were “warm,” meaning they were easier to convert than a client referral or cold prospect. The point is, don’t assume a CPA with 1,000 clients will send you 250 referrals the first year. It’s more likely you will receive one or two, but as the relationship grows so will the number of referrals. It is a snowball effect, and the foundation you built and up-front investment of time and energy you made will pay off over time and in big ways.

Again, look at CPA alliances as a long-term investment and temper your expectations accordingly. Don’t try to force the relationship forward before the CPA is ready and be realistic about how many referrals to expect the first year or two working with a new CPA. Over time, as the relationship grows and you are intentional and consistent with your efforts, the number of referrals will grow as will the number of CPAs interested in pursuing a revenue sharing opportunity with you. It’s a lot of work, but it is worth it in the end.

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