how to avoid getting run over (or left behind)

smart cpas will remain their client’s most trusted advisor – but not by staying in their lane.

by kyle walters

are your clients asking you specifically for help with their insurance, investments and estate planning? are they asking you how these options impact their taxes?

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most cpas will say, “yes, all the time!” the reason clients are bringing these issues to you is because they trust you. cpas have long been viewed as their clients’ most trusted advisors. when most clients have financial issues or complexity to deal with, they go to their cpa first.

the other day, a client of mine lost a close relative very unexpectedly. he was pretty rattled and that got him thinking about his own future. he asked me to help him set up an estate plan asap, but i told him that wasn’t my area of expertise and we would have to get an estate planning attorney involved.

the key is that i didn’t simply walk away after making the referral. i stayed on top of my client’s estate planning process, even though i’m not an expert in estate planning. here’s why:

the estate planners had an excellent reputation and decided to put together an irrevocable life insurance trust (ilit) for my client. but the attorney messed up on the transfer of the policies in the trust. if i weren’t there at the meeting and hadn’t caught the estate attorney’s mistake, the client would have been looking at an eight-figure problem.

again, we’re not experts in estate planning, but as cpas, we are experts in our clients. we know what their real goals and objectives are. as a cpa, you need to protect your client at all times. clients are not going to ask you, “did the attorney calculate the internal rate of reserve on the cash value of the policy correctly?” no. they’re going to ask you if you think the attorney is doing the right thing for them. as a cpa, you’re the gatekeeper for your client.

“even if you’re on the right track, you’ll get run over if you just sit there.” – will rogers

clients not only trust you to stay on top of all aspects of their financial lives, they assume you are already doing so. however, the reality is that most cpas like to stay in their lane and stick to what they know they are good at – taxes, auditing, compilation, balancing credits and debits. they don’t want to venture too far from those areas. if you think you know what you’re good at, you might think you know your value to your clients. not so fast!

the problem with that mindset is that your finely honed ability to report financial history is now something that a computer can do very quickly and very inexpensively. you can’t be an expert in filing taxes. it’s not something you’ll be able to continue doing to drive value for your clients over time. if that’s all you provide, then you are an interchangeable piece of your client’s (often complex) financial puzzle. your practice is at risk of being “commoditized” unless you change your mindset soon.

so, how are you going to be relevant and successful in the future?

if you truly understand this harsh reality, and if you want to have a thriving practice in the face of increasing commoditization in the accounting industry, then you have two options going forward:

1. tell the truth, and pick a niche silo.

you can stop trying to manage your clients’ expectations and admit to them that you are content just to stay in your lane. that’s fine. just understand that you’ll have to relinquish your role as their most trusted advisor. you’ll have to remind your clients that you’ll simply be preparing their taxes and that you’ll continue to do that job very well. but very soon, you’ll just be one specialist in a team of financial experts that is being coordinated by an expert advisor – not by you.

of course, you’ll have to let clients know they’ll need to find another “most trusted advisor” to rely on when they have complex financial decisions to make. again, you will need to be very clear with your client that you are just going to be their tax guy (or girl) who will continue pulling together their financial history, filling in the boxes on their tax forms and keeping current with all the tax rules and regulations. there’s nothing wrong with that. but being a general tax historian is not enough to drive significant value over time. in order to be successful with this business model you must build expertise in a specific arena that your clients can’t get anywhere else.

2. secure your client’s future (and yours).

if you want to remain your client’s most trusted advisor, then you must understand that your clients need your expertise, not simply number-crunching. that is just the method for delivering what your clients are really paying you for. you need to understand that your clients are hiring you to be an expert – an expert who helps them achieve their specific goals. you need to let clients know that what you deliver is specific advice to address their unique financial goals. essentially, you become an expert in what’s most important – your clients. anything else can, and will, be outsourced.

in order to do this, you need to have a solid understanding of all the moving parts that clients usually come to you with: trust planning, portfolio management, insurance and corporate benefits, to name a few. as overwhelming as that may sound, you don’t actually need to be the expert in any of these areas. you only need to know enough about your clients and their goals in order to coordinate and facilitate a team of experts who will help them in each specific area. you simply need to let each member of the team know how to implement their specific part of the client’s overall financial plan. that way you can give your clients a single number to call – yours – the person who is their most trusted advisor.

as the person who’s the expert in your client’s financial life, your fees will become inelastic rather than elastic. you’ll be able to raise your fees because your clients are paying you to coordinate all the moving parts in their financial lives. as their financial lives get more complex, they will gladly pay you more to keep from having to deal with all their financial complexities by themselves.

if you’re not willing to get out of your lane and help clients see their complete financial picture, do you really deserve to be their most trusted advisor? do you want to be the client’s most trusted advisor or simply be a piece of the puzzle that the client’s most trusted advisor calls as needed?

your clients will eventually find someone who can help them fit all of their financial puzzle pieces together. are you going to let that person determine whether or not you are the right fit for the newly assembled team?

posted on july 8, 2017