Accounting For Success

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.”