When providing high-quality service to individual clients, whom a CPA knows is often just as important as what a CPA knows. Being able to call upon a trusted network of professionals, such as estate attorneys and insurance agents, enables you to offer clients more comprehensive planning and guidance.
Jim Sullivan, CPA/PFS, a CPA financial planner from Wheaton, Ill., counsels clients specifically on care costs for chronic or serious illnesses, including illnesses that strike clients during retirement. It has taken Sullivan more than 15 years to build his network, which includes professionals who are even willing to help Sullivan's clients at a low cost, or even for free.
"It is hard to turn away a client who has just been diagnosed with Lou Gehrig's disease just because they cannot afford professional services," he said. "I've found professionals who will step in and help regardless of the fee." He frequently works with such professionals as attorneys, "social services, agencies, geriatric care managers, and in some cases foundations that advocate for a particular disease, such as Alzheimer's disease."
As Ted Sarenski, CPA/PFS, CEO of Blue Ocean Strategic Capital LLC in Syracuse, N.Y., pointed out, "CPAs who are going to be advisers to their clients need to develop working relationships with many different non-CPA professionals to offer a truly better product to their client."
Often, clients are busy and frequently don't have the desire or knowledge to find separate advisers for all their needs, nor do they want to act as a go-between when those professionals need to work together, Sarenski said. In fact, clients today may be looking for their CPA to serve as the primary point of contact and coordinate all their financial components.
Sarenski and other CPAs who also hold the PFS credential offered their advice for establishing an extended network:
Finding the best professionals takes time. Building a network requires CPAs to be proactive and patient, said Jean-Luc Bourdon, CPA/PFS, founder of Lucent Wealth Planning LLC in Santa Barbara, Calif.
Finding the right contacts "can be hard because the combination of expertise, responsiveness, and customer service is elusive," he said. "So, you kiss many frogs, as the saying goes."
It also might take a few interactions for other professionals to warm up to you, Bourdon said.
"When busy experts don't know you, they can be cautious or simply not interested in collaborating with you," he said. "So, it helps to start with a few highly respected and well-connected professionals and ask them for introductions to tap into their network."
Vet other professionals before you connect them with clients. Because a referral may reflect back on the firm, it's essential to vet anyone you recommend to clients, Sarenski said.
"Networking events are good for an initial introduction, but it is important to do due diligence on the other professionals you are going to have do business with your clients," he said. "You want reputable, honest, hardworking, responsive professionals who will treat your client as you would. Not everyone you meet is going to fit what you are looking for."
CPAs should interview professionals to learn about how they work, what they charge, and most importantly, whether they would follow the client's agreed-upon financial plan or make recommendations of their own.
"For example, if we recommended our client get a $500,000 term-life insurance policy based on our planning, we don't want an agent selling them a $2 million whole-life insurance policy," Sarenski said.
It's important to cross-reference your contact against the organizations they say they're affiliated with, said Susan Tillery, CPA/PFS, president and CEO of Paraklete Financial in Kennesaw, Ga.
"If they're an attorney, we check the American Bar Association, or if an insurance agent, their state insurance commissioner,'" she said.
It's also appropriate to ask the contact for a list of references and to look them up on social media, Sarenski said, noting, "it is amazing what people will put out on their personal social media that contradicts their professional image."
Note that even with all of the vetting and interviewing, you're not always going to find your client's perfect match, Bourdon said.
'It's not uncommon to make a referral that doesn't work out," he said.
Help clients make the right match. When Bourdon makes a recommendation, he tells the client the pros and cons of working with that person. "For example, I'll point out if the expert is expensive or has idiosyncrasies," he said. "Clients value our opinion, and they appreciate our candor."
Be mindful of referral regulations and ethics. When working with other advisers, it's important to consider regulatory and ethical guidelines related to referrals, Bourdon said, such as the AICPA Code of Professional Conduct, the AICPA's Statement on Standards in Personal Financial Planning Services (SSPFPS), and state-specific regulations. For example, the California Board of Accountancy prohibits licensees from receiving or paying any fee or commission solely for client referrals, he said.
The experts agreed that working with professionals from other backgrounds and areas of expertise enhances what most CPAs could offer on their own.
"Working with other advisers creates collaboration," Tillery said. "Collaboration benefits both the client and the advisers, and brings a collective wisdom to the group."
— Samiha Khanna is a freelance writer based in North Carolina. To comment on this story, email senior editor Courtney Vien.