CPAs have long been sought after as centers of influence by members of the financial services profession. But, the role they play and how they are perceived and accessed by financial advisors is undergoing a dramatic shift, and we are at the dawn of a new era.

CPAs as a whole want to become the most trusted business advisor of their clients, those who wish to work with them must evolve in their thinking and processes or be left far behind.

This is expertly outlined in Lindsey Ferguson’s article in the May 2012 issue of the Journal of Accountancy, which explored in depth the way CPAs will need to be engaged as COIs in the future.
Currently there are many programs, such as Perfect Client, Winning With CPAs, and CPA Squared, offered to those in the financial services industry, which focus on educating and training financial advisors who want to work with the accounting professionals based on this new paradigm.

I have spoken with several of the leaders of these organizations as well as the attendees to get a feel for the main tenets of their progressive approaches and the benefits of these programs. Each has a unique methodology and deliverables in which they engage and embrace the CPA as a COI; however, there are areas they share in common. In compiling my data I find that three primary (and most desirable) concepts stand out and help to succinctly illuminate the future of the relationship between the financial advisor and the CPA.

The first and foremost is that the CPA becomes the “client,” not the end user. To build and develop the relationship in this manner, the advisor must create value, foster trust, and treat the CPA as their client and partner. Nothing is done with the end user without the CPA directly involved. Additionally, the solutions to specific planning issues and problems are presented to the CPA, not the end user, so they can make the initial presentations and recommendations. This puts the CPA in an entirely different position and helps to solidify them, and not the financial advisor, as the end user’s most trusted business advisor.

In addition, the financial advisor is backed by a team of experts in a variety of topical areas, ranging from specialized qualified and non-qualified planning to asset management and protection, and gives the CPA full access with the advisor at the “hub.” The CPA then has the ability to deliver a wide range of specialized solutions and services to their client base, enhancing their value and relationships with their clients, while simultaneously differentiating them from competitors in their industry.

This leads directly into the second theme, which is how financial advisors must deliver value to the CPA by not only providing the best team and resources but also creating organic growth of their practice from within via their best clients. For example, in the past the CPA might refer a client to a financial advisor. If the financial advisor was successful, the client might, for example while on the golf course, say to their friend, “You need to see this financial advisor as he/she really helped me.”

This creates no value for the CPA, nor is there any organic growth. The endorsement by the client to his friend possibly creates another client for the financial advisor, not the CPA, and at worst if the work done for the client is not satisfactory, reflects badly upon the CPA. Hardly a “win-win” situation.

With the fundamental shift in the relationship, with the CPA as the trusted business advisor, the financial advisor’s role shifts to the “hub” of a team of top-notch professionals and resources. The CPA initially presents the possible solutions to their client, and nothing is done or accomplished without the CPA directly or indirectly involved.

Now the client on the golf course says to their friend, “You really need to see my CPA as he/she has the expertise and team of top-notch professionals that really helped me.” The CPA now gains that referral and truly builds their practice via organic growth from within. In this scenario, real value is created, and a true, mutually satisfying, relationship is built and fostered between the CPA and the financial advisor on a “win-win” basis.

Finally, the financial advisor should focus on fewer, yet deeper and more meaningful relationships, with CPAs. In the past it seemed the primary goal was to engage and work with as many CPAs as possible. Concurrently, the financial advisor in most cases did not fully bring an expert team of professionals to the relationship but relied solely upon their own skill set in one or perhaps multiple practice areas. Thus, it was left to the CPA to fully construct their own comprehensive team in which they may or may not have had the time or resources to assemble, vet, and oversee quality control.

In order to thrive in this new environment, less becomes more. Initiating and developing perhaps only three to five new relationships per year, depending on the size of the firms involved, is desired. A more comprehensive approach of providing expertise and resources to the CPA, which they possibly could not have obtained nor had access to, all while delivering value and building trust, is at a premium.

The end goal is to enable the CPA to cement their role as the most trusted business advisor and expand their practice by offering on a continual, not periodic, basis high-end comprehensive support and solutions. Focusing more time and resources on fewer relationships is crucial and a key to success.

According to Alex Sonkin, CEO of Perfect Client, “The real inconvenient truth is that the current model upon which advisors, CPAs, specialists, and attorneys attempt to work together is broken, and deep down everybody knows it. The industry's response, specifically from seasoned CPAs, top-performing advisors, and the AICPA has been humbling and overwhelming.”Forward-thinking CPAs who understand and have a firm grasp on these concepts will undoubtedly be at the forefront of establishing themselves as their client’s most trusted business advisor, creating new revenue streams, and dominating the marketplace.

Brian D. Hartstein, MSFS, CLU, ChFC serves as CEO and principal of Economic Concepts, Inc. in Scottsdale, Ariz. He concentrates primarily on working with CPAs, financial advisors, successful business-owners, and affluent clients in the qualified and non-qualified plan markets, estate planning and financial and investment planning. He is currently on the advisory board of the Phoenix Tax Workshop, a member of the Society of Financial Service Professionals, a member of the Arizona Business Leadership Association, and served as president of the Financial Planning Association of Greater Phoenix.