CEO & Founder, CLJ Advisory LLC.

Benefits to a COI partnership – #1: Serve The Client Well

In this series of blogs, I’m going to discuss 4 main benefits from having partnerships with CPAs and attorneys.  You may ask yourself, “why should I establish these connections when it can be so challenging?”  At least that’s what I’ve been told by so many financial advisors.  Some have been burned by the relationships, while others say how CPAs are not easy to work with and they aren’t good people to do business with.   I’ve also heard that they don’t give referrals and it’s a waste of time.  But then on the flip side, I would hear from other advisors that have great success in this area.  Additionally, the firm you work with now may be encouraging you to go out and develop these relationships.  Why is there such a disconnect?  I will address that question at a later date.  For now, I want to inspire you to master this area of practice management.  


In this article, I will focus on the first benefit.  While COI partnerships will benefit your business, the first benefit (and most important one) is to your client.  Years ago, I worked in New York City.  I felt that everything about that city revolved around money.  The name of the game was (is) accumulation.  After listening to financial advisors from all over the country, I began to see that it wasn’t just about being in New York, but it was the industry itself that trained us to think about money a certain way.  I began to see how many financial advisors were more concerned with their commission, rather than providing the best value to their client.  Working on the desk at Smith Barney, the common question from financial advisors was, “how much do I make?”.  Years later, I saw the financial crisis of 2008 produce so much bad press towards Wall Street.  The infamous arrest of Bernie Madoff only made the perception of the industry even that much worse.

Please understand that I’m not saying that getting money is a bad thing, at all.  But what I’ve seen is that the wealth mindset of the industry can cause some to put their own needs first, with the client coming in last.  In some cases, clients even get mistreated or abused because of their advisor’s desire to accumulate.  Let’s change that by putting their needs first.  When you partner with CPAs and attorneys, your client benefits in three ways:


The first way that your COI partnership benefits the client has to do with your increased level of education.  As you work closely with the professionals, you will learn more about tax planning or estate planning.  When you increase your education in other areas of planning, you are able to give much better advice to all of your clients.  Oftentimes, your discussion with a client goes beyond the scope of your financial plan or product.  In a meeting, they may even ask you questions better suited for a CPA or attorney.  While you have your limits to giving tax or legal direction, you will be in a much better position to guide them.


As your education increases, so will the quality of your advice.  Let’s say you are working with a CPA for the benefit of your client.  You are with your client in their CPA’s office working on a pressing tax situation.  The ideas that you come up with coupled with the ideas of the CPA (or attorney) can produce an optimal strategy for the client.  This could be in the form of a product or the construction of a portfolio.  I once listened to an RIA from Colorado talk about being in his conference room with his client, a tax attorney, and other advisors.  They were trying to come up with a solution to a complex challenge their client was facing.  After about an hour, the solution finally came and they were able to help their client.  Since they were all in a joint meeting, they were able to discuss ideas that may not have been derived if the client was meeting only with the RIA or only with the tax attorney. 


The last way the client benefits from your partnership with COIs is that you may save them time and money.  As an advisor that is concerned about their total financial picture, your client sees your knowledge and the ideas you give them.  If you are able to address more concerns outside of your financial plan, they might not have to make that extra phone call or have that extra meeting (which they get billed for.) 

With these points in mind, let’s think differently about your COI partnerships.  As you can see, these relationships are more than just having a CPA give you referrals.  The COI partnership is a major way that you can serve your client well.

I wish you the best success ahead!

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