It seems like common sense, if not natural symmetry, that financial advisors and certified public accountants would have a symbiotic relationship when it comes to serving the same clients—advisors do the planning stuff, CPAs do the tax stuff, and somewhere in the process the twain shall meet as they join forces to serve a client’s best interests.

But it’s not that simple, considering how some accountants feel about advisors. Listen to this story shared by Jonathan Kuttin, managing partner at Kuttin-Metis Wealth Management in Melville, N.Y., a wealth advisory practice of Ameriprise Financial Services Inc. that has piggybacked its relationships with CPAs to significantly grow the firm in recent years.

In 2001, the lightbulb went on over Kuttin’s head that there was a great opportunity for synergy between these two professions to provide one-stop shopping for clients. So he proactively met the CPAs of his clients and eventually hit it off––and formed his first professional relationship––with a CPA named Kenneth Cerini, whose practice was nearby on Long Island.

“The first time Ken Cerini spoke to a group of financial advisors, there were about 50 or 60 advisors in the room, and I introduced Ken as my guest and someone who could help advisors understand the mind-set of CPAs. And the first words out of his mouth were ‘CPAs view financial advisors as a small step above used car salesmen,’” Kuttin recalls.

“That’s what CPAs believe, and it comes from when they call advisors for tax basis information and some advisors don’t get right back with them,” Kuttin adds. “They’ve seen advisors taking distributions without withholding income taxes. They’ve seen accounts that might’ve been traded too much and advisors who might’ve charged too much. These are their valued clients, and CPAs are reluctant to refer their clients to someone who could hurt them. That’s the disconnect.”

Kuttin makes it his business to turn that disconnect into connections between advisors and CPAs. For starters, Kuttin-Metis Wealth Management has about 50 relationships with CPAs where it acts as the financial planner for hundreds of those firms’ clients. Many of these are dual relationships where the CPA firm serves as the tax advisor for Kuttin-Metis’ existing clients.

In addition, for the past six years, Kuttin has provided financial advisors with specialized coaching on how to approach CPAs, interact with them and use that relationship to leverage growth.

“The hardest part is building relationships with CPAs,” Kuttin says. “Once it’s built, it works seamlessly as long as you have the right process in place. It’s really hard to get CPAs to trust and want to work with advisors.”

Venus And Mars
“Advisors don’t know how to communicate with CPAs,” Kuttin asserts. “It’s like CPAs are from Mars and advisors are from Venus.” Kuttin is referencing the bestseller relationship guide, Men Are From Mars, Women Are From Venus, the title of which has become a catchphrase when comparing dissimilarities between two entities.

Cerini describes it another way. “Accountants tend to be more conservative, while advisors tend to be more sales-y,” he says.

Cerini, managing partner at Cerini & Associates LLP, a CPA firm in Bohemia, N.Y., notes there’s a distinction between brokers and advisors, and he says after he met some of the former he “felt the need to wash my hands because it wasn’t about what we could do for the client and how we could join forces to create a better outcome for the client, it was ‘I could sell stuff to your clients and could give you money.’”

He says people like Kuttin give financial advisors a good name, but Ponzi schemes and other scandals involving Bernard Madoff and others in the investment advice business give accountants pause when it comes to working with financial advisors. “Some accountants tend to not want to recommend advisors [to their clients] because there’s the fear if the advisor does something wrong they could lose that client relationship,” Cerini says.

He notes that collaboration and communication are keys to the CPA-FA relationship. “Having good communication is what it’s all about because if something is happening in the client’s tax life that can be relayed to the financial planning side they know what’s happening and can prepare for it regarding their investment strategy, and vice versa.”

Different Options
Jonathan Kuttin started a solo advisor shop in 1994 after graduating from the State University of New York at Albany. His practice eventually grew, and in 2012 he partnered with Metis Group, a large CPA firm in New York City. Today, Kuttin-Metis has 14 advisors and 19 paraplanners and support staff serving roughly 1,200 mainly mass-affluent families with about $1.5 billion in assets.

After his epiphany about teaming his advisory practice with CPAs, Kuttin began making the rounds and knocking on the doors of some of his clients’ accountants. Initially, he got nowhere fast.

“I went out and turned off CPAs by leading with all of the wrong things,” he explains. “At the end of the day, what this is all about is CPAs will do business with a financial advisor only if they think it’s good for their clients. I think a lot of advisors present it as a business opportunity first by promising to create a new revenue stream for their practice. That makes business sense, but you won’t go into business with someone unless you trust them and believe it’s good for your clients.”

Kuttin says he eventually learned the ropes with the help of Kenneth Cerini. “Ken is an integral part of that because I’ve built a great relationship with him and he gave them an insight into the mind-set of CPAs. Once you understand that mind-set, it’s easier to communicate with them in a way that will interest them. I teach advisors how to get on the same page with CPAs.”

And advisors are willing to listen to what Kuttin has to say because of the success his firm has had in working with CPAs over the years. The majority of Kuttin-Metis’ roughly 50 CPA relationships are in the New York metro area, with others located around the country that he’s built through his coaching business.

After a relationship between a CPA firm and Kuttin’s firm is established, the process goes something like this: The accountant identifies a client who could benefit from Kuttin-Metis’ financial planning services and recommends Kuttin to the client as someone who could add value to them. If that leads to a meeting between Kuttin and the client, and the client wants to work with Kuttin, they have three options.

The first entails a complete separation of duties where the accountant isn’t involved in the financial planning process at all and just sticks to his or her tax advisor role while Kuttin’s firm provides financial planning advice.

With the second option, the CPA can be involved in the financial planning process to ensure the tax and financial planning are integrated. “That entails spending about two or three hours a year with the CPA on that client’s behalf doing tax planning and having the CPA join us for a meeting or two,” Kuttin says. He notes the CPA can bill the client separately for the work they put in on the planning side.

The third option is similar to the prior option, but instead of the CPA billing the client separately he or she can be paid as part of a compensation-sharing arrangement with the financial advisor. “Generally, we offer CPAs 20% of the revenue from the client relationship,” Kuttin says. “That has to be disclosed to the client so they’re fully aware the CPA is working in a dual capacity by being compensated for financial planning or investment advice separately from their tax work. We have clients sign off on a form that says they accept that.”

He adds the third option only applies if the accountant has the appropriate licenses in the state they operate in because every state has different rules regarding how CPAs can be compensated.

Kuttin says the vast majority of clients prefer to involve their accountant in the financial planning process because they trust them, and he believes that working in tandem with a client’s tax advisor is a win-win-win situation for all parties. “I believe the client gets a better overall service package if financial planning and investments are tied in with tax planning.”

But it’s not always sunny-side up for all parties after an engagement begins. “We’ve had clients leave Jon because at the end of the day he wasn’t the right fit for them,” Cerini says. “And we’ve had clients leave us and stay with Jon.”

Nonetheless, Cerini believes the CPA-FA relationship is overwhelmingly beneficial for both entities when done correctly. “The important aspect is having that teamwork between the financial advisor and accountant,” he says. “That level of communication and looking after the client’s best interest in bringing two heads together is what’s important.”

All told, Kuttin-Metis’ relationships with CPA firms have been very fruitful. “It provides quantum growth for our firm,” Kuttin says. “We’ve brought on more than 200 clients since January.”

Coaching
That notion of “quantum growth” is highlighted on the website for Kuttin Consulting Group Corp., a coaching and consulting business designed to help advisors build mutually beneficial relationships with centers of influence––including CPAs. Kuttin says he spends about half of his time doing consulting work, and each year his outfit provides specialized coaching to between 75 and 100 advisors across all industry channels on how to approach and cultivate alliances with CPAs.

The program includes 20 hours of training that includes a full-day live event followed by 12 monthly webinars. The live event often takes place on Long Island, but also includes training days around the U.S.

The program has two fee levels: $700 a month for the all-inclusive version that includes the full-day live event and $500 a month for the strictly web-based version. “The average advisor who does our coaching program builds two or three relationships with CPA firms in the first year of the program,” Kuttin says. “The root of what we really teach advisors is how to build credibility with accountants. My process builds credibility and shows CPAs what makes us better and different than the competition. Advisors who understand how to articulate that and have a process to show it will be the ones who’ll be successful.”

David Burgio, founder of Custom Wealth Strategies in Amherst, N.Y., ventured from the Buffalo area down to Long Island last September to attend a training event and subsequently has sat in on monthly webinars as part of his training.

“It’s been very worthwhile,” says Burgio, whose company has roughly 150 clients and focuses on executives, physicians and affluent retirees. “People talk about the benefits of setting up a relationship with a CPA, and there are different marketing programs about the best way to do that. What I’ve found with this approach is it’s the most non-sales-y way of setting up a true relationship with a CPA firm.”

Burgio sports the CPA designation among his credentials, so you’d think he’d know how to approach his fellow CPA brethren when trying to cultivate them as centers of influence. “When somebody is doing something really well, why reinvent the wheel?” he explains. “Jonathan has been very successful by creating a methodology, and that system completely resonates with me.”

After going through the coaching program in September, Burgio says he started reaching out to CPAs in December and January before cooling it as tax season heated up. His initial forays did lead to one formal relationship with a CPA firm, and he’s in the process of following up with other CPA firms now that April 15 is in the rearview mirror.

“I’ve found CPAs have been very receptive with the meetings, and there’s been a lot of interest to carry this forward,” Burgio says. “I was happy to get that kind of result in so short a time period.”