Many accounting firms have significant clients in both number and quality. Most, if not all of them, can meaningfully benefit from high-quality wealth management services and products. This reality, coupled with the profit potential of wealth management, has led some accounting firms to establish their own wealth management practices or develop strategic partnerships with wealth management firms with whom they share revenues.
The logic of this approach at accounting firms interested in more comprehensively serving their clients and generating wealth management revenues is undisputable. What is quite common is that a great many opportunities are never realized despite a plethora of tremendous possibilities.
All too often the ability to capitalize on the affluent clientele of the accounting firm is not realized. It is common for many accountants to not be very proactive in identifying wealth management needs. Part of this is likely motivational, including a concern that if the financial services and products do not deliver as promised the accounting relationship will suffer—and it likely would. Part of it is a lack of processes that can facilitate identifying wealth management opportunities.
A bridge has to be built between the accountants and the wealth managers. One powerful approach is to put systems and mechanisms in place that motivate the clients of the accountants to request wealth management solutions. For example, in a very structured way, distributing high-quality thought leadership content, coupled with a concentrated follow-up approach, is extremely effective in getting successful business owners and the wealthy to connect with an accounting firm’s wealth management practice. It also regularly results in more accounting business, as well as referrals to new business owners and wealthy individuals.
Other approaches, such as expertly dissecting an accountant’s clientele, always leads to wealth management opportunities. An approach with a long track record of success is to use a profiling tool like the Whole Client Model. After the opportunities are identified, it is still necessary to approach the clients with a persuasive narrative.
The ability to maximize client relationships with the successful and wealthy is the low-hanging fruit at most accounting firms. Revenue increases of 20% to 40% or more per accountant per year are not that uncommon when the right methodologies are skillfully implemented. It does not matter if the wealth managers are internal to the firms or connect to them with a revenue sharing arrangement. The same approaches produce a steady stream of new affluent clients for financial services and products.
Clients, accountants and wealth managers potentially benefit tremendously in creating a very successful advisory practice within or associated with an accounting firm. However, few accounting firms going this route are achieving anything close to their potential.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.