Converting Your Tax Clients Into Personal Financial Planning Clients
Every successful CPA has accumulated a list of clients that allow him or her an abundance of financial planning opportunities. You have probably had an experience with a client asking for your opinion on how much they need to save for a secure retirement, or how to set up a budget – topics well outside the immediate tax realm.
Unfortunately, few CPAs offer financial planning services to their tax clients, and fewer still do so successfully.
What’s the secret?
Make the mental shift
Tax preparation is primarily past-oriented. While there is tax planning and forward-thinking involved, the majority of the puzzle deals with what has already happened. An experienced tax preparer can answer most questions from clients on the spot based on his or her extensive knowledge of the tax code.
Financial planning requires an orientation on the future, which is unknown by definition. That means greater uncertainty. Because financial planning requires an extensive understanding of the client, as well as a wide range of investment options, time and research are often needed to get to the right answer.
In order to integrate financial planning into your professional practice (and into who you are as a professional), you must be prepared to shift from the past-oriented world where you have all the answers to an uncertain and risky future-oriented world, that requires you to get comfortable with not having the answers on the spot.
Invite your clients to have a conversation
Reach out to your clients and invite them to have a conversation about financial planning. Inviting a client means asking them to schedule an appointment, putting that appointment on the calendar, and following up if necessary.
This piece is critical for your success – do not buy into the illusion that simply putting new certifications on your business card will generate business!
If taxes are your comfort zone, lead with taxes! In fact, a 1040 is a document that can give you insight into many aspects of the client’s financial life, from retirement planning to investments and insurance.
The AICPA website offers a checklist for identifying financial planning opportunities on a tax return, but here are just two examples. Perhaps you have observed that the client’s investment sales are generating an excessive tax burden. Maybe you have noticed a sale of a vacation home. Use those as a springboard for having a deeper conversation.
Communicate your value proposition
Become proficient at communicating your value proposition. Practice until it is clear, concise, and impactful. Value statements work best when they use authentic client language – so be cautious about using jargon and complex industry concepts. Keep it simple and actionable.
Structure the discovery conversation to go beyond immediate needs towards deeper values. What is driving the client? Why is money important, and what is it for? Your ability to connect to their essence will be a significant determinant of whether they trust you with their financial planning.
Ask for the next step
After the discovery conversation is over, communicate a clear next step and timeline. Perhaps the client is coming back to a follow up appointment in 3 days, to allow you some time to create a financial plan. Maybe the client is not ready to make a decision yet, but is open to speaking again in 3 months. No matter what the next step is, get it on the calendar, and follow through.
Create and maintain a marketing calendar and a pipeline
Create a marketing calendar with specific actions and due dates.
Be sure to maintain a client pipeline file as well – record and track every prospect you have, and their progress towards becoming a financial planning client (outreach, first appointment, second appointment, etc.)
Some CPAs track their prospects in Excel, while others use CRM packages. Regardless of the tool you select, use it consistently for best results.