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Karen Lee
Karen Lee
Growing Your Business by Partnering With Investment Advisors

Tax season is behind you. Time to focus on business development.

June 17, 2010
by Karen Lee, CFP, ChFC

Now that the rush of tax season is over and you’ve taken that much needed vacation, it’s a perfect time to step back and take a look at your business development plan. For those of us who work with individual and business clients on issues related to investments, there are many similarities in how we build our businesses.

Ask a financial advisor, attorney or CPA how they get new clients and the answer most frequently heard is, “through referrals.” That makes sense as we’re all in the business of building trusting relationships with our clients. As a result, we become privy to a lot of information that gives us insights into the client that probably goes beyond just the immediate work we’re doing for him or her.

As a CPA, you are in a position to be able to identify needs that the client may have that are not being addressed. For example, are the client’s investments being managed in the most tax-efficient manner? Has the client done any estate planning? Is she saving enough for retirement? If the client has young children, what is being done to plan for educational expenses?

Addressing these types of issues may not be within your scope of expertise, but as a trusted advisor, you can add value simply by highlighting these issues. If you were in a position to refer clients to other financial or legal professionals whom you knew and trusted, you would add further value to your relationship.

Providing referrals to clients requires that you do your homework and identify professionals with whom both you and your clients can work effectively. When looking for financial advisors to whom you can refer, there are a number of things to consider.

  • Services offered — What types of services does the advisor offer? Is he or she a broker or a comprehensive financial planner who can help your client with a holistic approach to their financial situation? Your client might be best served by working with an advisor who has a similar outlook on money management to you and compliments the services you offer.
  • Client base — What types of clients does the advisor typically work with? A client with $200,000 in investable assets has very different needs from a client with $5 million. Business owners have different needs from long-time employees with 401(k) or 403(b) rollover issues. If you tend to work with a particular target market (divorcees, small business owners, and employees from a particular company or industry) you might look for an advisor with a similar focus.
  • Fee structure — How does the advisor get compensated? Is s/he a fee-only or fee-based advisor who is able to recommend product solutions based solely on whether they best meet the client’s needs? If s/he receives commissions, is s/he independent of the companies whose products s/he recommends?
  • Background check — Before partnering with an investment advisor, ensure that the advisor has a clean record.  The last thing you want to do is refer your clients to someone with a blemished record. There are a number of ways you can access background information, depending on the licensing of the advisor.
    • Registered Investment Advisor — Ask to see the advisor’s ADV Form, Part II. This is a form that a planner files with the SEC (U.S. Securities & Exchange Commission). It contains information about the advisor's background, services, and fees. Next, check with the adviser's state securities regulator to make sure the individual is licensed and to check for complaints.
    • Registered representative — Use BrokerCheck on the FINRA website.
    • If the advisor you’re thinking of partnering with has a CFP, the Certified Financial Planner Board of Standards investigates complaints filed against CFPs and lists any disciplinary actions on its website.

If you don’t know any financial advisors in your area, there are several ways to make connections. The AICPA’s Personal Financial Planning website has a “find a planner” search feature on their website.  You can also find potentially compatible investment advisors by talking to the advisors that your clients already have relationships with. 

Building relationships with investment advisors in your area not only helps your clients work in collaboration with their two most needed financial experts, it also helps you develop mutually beneficial relationship with other professionals. By referring clients to other financial professionals in your community you are further developing your network of people that will most likely reciprocate and send referrals to you — an ideal business development opportunity.

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Karen Lee, CFPâ, ChFC, MSFS, AEP is a financial planner in Atlanta and author of the forthcoming book, “It’s Just Money - So Why Does It Cause So Many Problems?” Reach Karen through her website, www.KarenLeeAndAssociates.com

Securities offered through Securities America, Inc., a registered broker dealer, member FINRA/SIPC, Karen Lee, Registered Representative.  Advisory and planning services offered through Securities America Advisors, Inc., an SEC Registered Investment Advisory Firm. Karen Lee, Investment Advisor Representative, Karen Lee & Associates, LLC, Integrated Financial Group, Inc., and the Securities America Companies are unaffiliated.

The AICPA PFP Section provides information, tools, advocacy and guidance to CPAs who specialize in providing tax, retirement, estate, risk management and investment advice to individuals and their closely held entities. Included is access to Forefield Advisor, an online library with information that can help describe topics like this for clients. All members of the AICPA are eligible to join the PFP section. For CPAs who want to demonstrate their expertise in this subject matter apply to become a PFS Credential holder.