Culture Clash

Financial advisors have to be ready to work with CPAs.

By John Bowen, founder and CEO of CEG Worldwide

A few months ago, I told you that now is the perfect time to pursue strategic alliances with other professionals—and in particular, CPAs, who are ideal partners for advisors who use a consultative wealth management approach with their clients (see “Reaching Out Now,” March 2009). But financial advisors have to be ready to work with CPAs.

Many financial advisors—even highly successful wealth managers—report having difficulties in creating successful alliances with CPAs. The main stumbling block? They don’t understand what CPAs really need and want. They don’t take the time and effort required to understand CPAs’ problems, firms and cultures. As a result, many CPAs aren’t overly impressed with advisors’ business overtures.

Often, financial advisors lack the empathy that generates this knowledge. Empathy means directly identifying with another’s situation, feelings and motives. When you empathize with someone, you project yourself so thoroughly into the person’s specific situation that you vicariously experience what that person is experiencing. Empathy can be a powerful ally when trying to sway someone toward your way of thinking.

To deepen your level of empathy and increase the likelihood of creating a great strategic alliance, start by learning all you can about accounting firms and the current challenges they face. Doing this prep work builds the empathy you will need to overcome a pervasive challenge: most CPAs have an unfavorable view of financial advisors and their firms. This view derives from a culture clash. CPAs believe financial advisors focus solely on transactions, selling products without a comprehensive view of their clients’ needs.

To create alliances with CPAs, you first have to understand the way most CPAs perceive most financial advisors and then do what’s necessary to show that who you are, and what you offer their clients, is quite different from their expectations. You must communicate that you bring to the table an opportunity that will benefit everyone involved in the process—-the CPA firm’s affluent clients looking for more services, the CPAs themselves and you, the financial advisor.

You will also want to make it easy for potential CPA allies to say “yes” to you by proactively preparing responses to the concerns they might have, including ethical, financial, legal and structural issues. Your answers should be carefully crafted to demonstrate that you are different from the financial advisors they may be accustomed to; you have a holistic focus that will greatly benefit their affluent clients.

Any advisor wishing to ally with a CPA firm must understand the wide variety of problems that CPA firms are facing. These include the obvious issues like the rise of self-preparation software, online tax-preparation sites and discount preparers, as well as the overall commoditization of CPA fees and increased competition that threatens future growth.

But there are also less well-known issues-including the loss by many CPA firms of “face time” with their clients, which makes it harder to retain them. In addition, the general grind of CPA work is deterring younger, talented individuals from entering the industry, making long-term growth and succession planning difficult.


Of course, one of the biggest challenges CPAs face is one of your biggest opportunities: the desire of many CPA clients to receive comprehensive financial planning and financial services from their accountants. The good news is that you can make a compelling case that CPAs can address nearly all of these difficulties by partnering with the right financial advisor-that is, one who provides comprehensive wealth management.

By adopting wealth management, you can quell the ethical fears that might prevent CPAs from working with you. And as a financial professional, you can show the CPA firm that with little effort on its part, you will create a substantial new revenue stream for the firm.

From a numbers standpoint, the argument is strong. Let’s say you are looking at a small CPA firm with three partners and $3 million in gross revenue, with an average take-home for each partner of $250,000. Generally, for every $1 million of a CPA firm’s gross revenue, there is roughly $100 million in client assets, so in this case there would be about $300 million in client assets that could be converted.

If you gain access to these assets, you can expect to generate gross revenues equivalent to roughly 1% of this amount-roughly $3 million. If the CPA firm receives 25% of that amount, or $750,000, each partner would take home an additional $250,000, thereby doubling his or her take-home pay.

Although the financial picture is enticing, it’s not enough to show that the CPA partners can increase their income. You also must emphasize that the CPA firm’s clients would be receiving the comprehensive wealth management services that they are already seeking and that would keep them as clients. Your approach should be to highlight the win-win-win situation an alliance would create-for the clients, the CPAs and you.

To demonstrate to the CPA partners that you have thought things through, you have to be aware of the benefits, risks and costs that will run through their minds. Imagine yourself going through each meeting with ready responses for any questions that might arise (see “Questions and Answers” at right).

For example, if a CPA firm is worried about its reputation, are you dedicated enough to world-class service to allay any fears they might have about how you will treat their clients? If the partners are worried about losing control of their clients, what procedures will you put in place to make sure a client remains with the CPA in both the short and long run?

What compliance issues might arise as the partnership develops? For example, each CPA partner who will share revenue must obtain the necessary FINRA licenses. Are you prepared to offer the CPA firm help in the licensing process? Can your firm provide administrative support or tutoring, and would it be proper for you to do so? If one of the CPA firm’s partners fails to receive his or her license in a timely manner, what contingency plans do you have in place to remedy the situation?


Before you set up a meeting, take a step back and think about your approach. First, change your own thinking about CPAs, making the effort to understand their challenges and empathize with them. Once your thinking has changed, you can approach a single partner in the CPA firm, the one you will enlist as your champion with the other partners.

Next, work on changing that partner’s thinking about financial advisors, so that he or she can then change the other partners’ thinking. The goal is for them to see financial planners in a new light, as the wealth managers they are today. Once they do so, they will be willing and able to present to their best clients the new and desirable option of working with a wealth manager.

This is not an overnight process, of course, and it’s not uncommon to run into a few hurdles. Changing thinking and opinions takes time and ongoing commitment to the process. But there’s no question that creating a strategic alliance with even just one CPA firm can vault you to a much higher level of success. Making the effort now can put you among the ranks of top advisors down the road.


Make sure you can answer any questions a potential partner might have about the benefits, risks and costs of doing business with you.

Benefits to CPA Firm

  • Substantially increased revenue with relatively little additional effort
  • Better overall services to existing clients
  • Increases client satisfaction and retention
  • Unique positioning for the firm
  • Higher firm valuations
  • Easier to attract new talent into firm

Risks and Costs to CPA Firm

  • Reputation risks
  • Risk of losing control over clients
  • Legal and economic risks/adhering to many rules and regulations
  • Cost and effort to obtain necessary licenses
  • Cost of forming appropriate legal entity such as an LLC

Source: CEG Worldwide.

Reprinted from: Financial Planning

About the Author

CEG Worldwide’s founder and CEO, John Bowen has long been known as a leader in the area of adding value to financial services firms. Bowen started his career as an independent broker-dealer representative and then became a fee-based financial advisor. He was ultimately named the CEO of Reinhardt Werba Bowen (RWB), a money management firm that helped other financial advisors raise billions of dollars in assets. In 1998, Bowen became CEO of Assante Capital Management upon the acquisition of RWB by Assante. He left Assante to start CEG Worldwide in 2001, in order to help advisors realize substantial success through the use of CEG Worldwide’s business development systems.

He is the author of many books, including Breaking Through: Building a World-Class Wealth Management Business and The Prudent Investor’s Guide to Beating the Market.