Read The Transcript Below:

 

Steven (00:35):

Hello everyone, and welcome to another episode of Retirement Tax Radio Professionals Edition. I’m your host, Steven Jarvis, CPA, and in this show I teach financial advisors how to deliver massive value to their clients with tax planning. And today we’re going to focus on working with centers of influence and specifically working with CPAs to get referrals. So right out of the gate, I just want to say that even though I’m not a financial advisor, I’ve spent my entire career hearing from people I need to work with centers of influence and from talking to advisors, I know advisors get the same advice that hey, you need to go out, meet the bankers, the lawyers, the financial advisors, the CPAs, depending on what profession you’re currently in, go out there and get all these referrals. Now, the piece that no one ever talks about though is how does that actually happen?

(01:21):

I spent years of my career going to Chamber of Commerce meetings and other local events telling myself I was going to get all these referrals, but never knowing what to do besides saying, Hey, can I have a referral, which never worked. So today I have a guest advisor here with me, Matthew Jarvis from the Seattle area, and at this point in his career, he gets about one third of his new clients each year from CPAs. So I’m really excited to have Matt here today to talk about his process for making that happen. So Matt, welcome.

Matt (01:51):

Hi Steven. Thanks for having me. I have to confess, it’s funny to hear a CPA say that referrals didn’t work well for them. Because when I talk to financial advisors, we, myself included universally across the board say, man, I send all these referrals to my CPAs, to my attorneys, and they never send any back. So in our minds, our kind of convoluted, diluted minds, the referrals are a one-way street despite what every marketing expert tells us, every marketing expert I’ve ever run into says, call your CPA and ask ’em for referrals. And my experience and the experience of almost every advisor I met, that approach gets a solid no. And I’m curious, see if you could explain to us why won’t CPAs just give us the referrals we want?

Steven (02:27):

Well, Matt, I’m sorry that’s been your experience, but to be honest, I’m not too surprised. So I can only share my experience, but I can tell you why I don’t send referrals to financial advisors. And, honestly, the single biggest reason is that even though we talk about CPAs going and getting referrals, as soon as we get to those events, we’re on the lookout primarily for the financial advisors and insurance guys to stay away from them. Because as soon as you start talking, they immediately go into sales mode of, Hey, I see that we serve the same clients. Maybe you could send them my way. And it’s like I just meant you. I don’t remember your name. I’m not entirely sure what financial advising even is. It seems like this very nebulous, what do you do? And so I don’t have a lot of reason to send people to you, and even if I’ve met you before and I think you’re a nice person, I still don’t know what’s going to happen to my client when they pick up the phone and call you. So no one’s ever led with, here’s what I’m going to do for your client. It’s always just, Hey, give me a referral. I don’t see why I have any motivation to send them to you.

Matt (03:24):

It;s funny you mentioned that a CPA who sends me a lot of referrals, she explained to me the other day that an advisor that I knew, I won’t mention his name, I’m sure he listens to the podcast, an advisor that I knew approached her and told her that he needs more clients for his practice, which is not her problem, but he needs more clients for his practice. He’s decided to specialize in working with women, and she’s a woman, therefore she must have women clients. And if she would just refer to him, actually, if she would just give him a list of all of her women clients, that would be great. She of course, was appalled and threw him out of the room and said to me, she said, Jarvis, I’m so glad that you’ve never taken that approach to me. I would never send you another referral again. So I think, Steven, to your point, CPAs don’t know what’s going to happen when they send a referral to an advisor, and most advisors come with this really sleazy sales approach like, you owe me referrals, send them my way.

Steven (04:13):

Not surprised. Those are the experiences that are out there. The other thing I would add is that for CPAs, everyone assumes we do taxes, which isn’t universally true, but it’s a very positive assumption at the very least. But for financial advisors, I’m not even sure what the default assumption is because there’s just a lot of uncertainty. Do you do investments? Do you do debt consolidation? Are you going to help me understand how much I need to save each month for my retirement account? I’m not even sure what you do. And so even if I don’t do taxes, if you assume I do taxes, it’s at least a net positive for me. So I feel like there’s too much risk to me if I send someone to you, because what if they come back and say, Steven, this Matt guy, all he wanted to do was sell annuities to me. That was the only thing you wanted to talk about. I go, great. Now my client’s upset with me because I made that referral. So Matt, you mentioned in there that your CPA friend was so glad that you don’t take that approach. So let’s talk about what approach you do take.

Matt (05:11):

And this is an approach that took me a lot of years to learn, and I got inspired to do it by a fellow financial planner who was having a lot of success, a side rant to always take advice from people who are doing, not from people who are saying, but my approach has been in very successfully so that I reach out to centers of influence. We’ll stay focused on CPAs for today, and I offer to pay for an hour of their time, which sets me apart from everyone else in two ways. One, nobody else is offering to pay for an hour of their time. Two CPAs live and die by hourly billing. And for someone to voluntarily offer to pay for their time catapults me in this new level that they have not seen. Now the reason I’m willing to pay for an hour of their time and I have to give them a reason because otherwise they’d be confused.

(05:53):

And the reason is that my clients are always asking me for referrals to CPAs or attorneys. Again, we’ll focus on CPAs, and so I call the local CPAs with CPAs in my niche and I say, Hey, listen, I have clients all the time that are asking me for referrals to CPAs. I can’t promise that I’ll send you any referrals because you may not be a good fit. Therefore, I want to pay for an hour of your time to get a better feel for how you work with clients so that I know which clients to best refer to you. Is that okay with you? And they nearly universally say, yes, that would be spectacular. No one’s ever done that before.

Steven (06:23):

Wow, that’s really interesting. I’ve definitely had plenty of people that would fall under centers of influence offer to take me to lunch, but it’s always this vague invitation that I know I’m getting lunch out of it and I’m trying to decide, is lunch really worth whatever else they’re trying to bring here? And so I guess how do you cut through that? Even if you call and offer to pay for an hour of my time, I’m going to be way more excited than if you offered me lunch, but there’s still going to be part of me that’s like, okay, well what’s the catch? What’s his hard sell halfway through this?

Matt (06:51):

Yeah, and I’m glad you mentioned that. And sometimes people forget that they forget as Americans or as an international audience, we’re always very nervous that we’re going to be sold. That’s the reason you don’t want to take a free lunch or that somebody offers to take your email address. You don’t want to give it to ’em. And so I make it very clear to ’em. I would say in our conversations or emails, I’d say, Hey, Steven, here are the list attached on the list of questions that I’m going to ask you during our meeting, so that way they know what I’m coming in with. I always like to joke with ’em, Hey, this isn’t going to be a quiz. It’s not a test. These are just things I need to know before I can refer clients to you. And then I put at the end of the email, Hey, you, I’m a professional. I would never insult your time by asking you for referrals or trying to sell you anything. I just put that right out there. As you pointed out, it’s the elephant in the room. They’re expecting to be sold something because that’s what every financial advisor they’ve ever met has done, and I need to right out of the gates manage that expectation that, Hey, that’s not why I’m here. That’s really interesting.

Steven (07:42):

Let’s come back to the questions you asked about one other question from my perspective as we get into this. So you say in your email, Hey, I’m not going to ask you for any referrals, but Matt, you’ve been doing this for a long time now I’m sure there’s things you can learn from a CPA, but especially if you do this over and over again, I’ve got to imagine that you’re going into that not expecting to learn a whole lot. How do you keep a mindset of staying open minded or trying to learn from them and not just thinking, Hey, when am I going to do a referral?

Matt (08:08):

Yeah, that’s a great question, Steven. So I always try to set up any prospecting game so that I can’t lose. So that’s another reason. If I go in and ask the CPA for referrals, again, terrible idea. Odds are they’re going to say no, and therefore I’ve lost the game. If I go in there saying, Hey, I want to see if you’re potentially a good fit for some of my best clients, I can only win that game. Either. I’m going to come out of that thinking that’s a CPA I don’t want to talk to again, I’d never sent a client to, which has happened, or I might think, wow, this is a really valuable CPA. They have great bedside manner, they have a good system in place. I think they’ll take really good care of my clients if I refer them to this CPA. So I’m really going in there on behalf of my clients. That’s my motivation on behalf of my clients. I’m taking time to interview this person.

Steven (08:48):

So even though we started this episode with, Hey, how do we get referrals from centers of influence? You genuinely approach this as the win for you is this screening process is either I’ve taken someone off the list that I’m going to refer to, or I’ve added another good resource to my list that I can work with with my clients.

Matt (09:04):

That’s right. Because as a financial advisor to my clients, I’m charging a premium fee and they say, Hey, Matthew, I need a CPA to help me with this. And if I say, well, you’ll have to Google it, or I’ve heard so-and-so is a good idea, right? Well, that’s what most advisors would say. That’s not delivering massive value. If I say, Steven, guess what? I’ve interviewed all of the CPAs or most of the CPAs in my area, and these two I think are really a good fit for your situation. In fact, I’d be glad to call Dave and make an introduction if that’s what you’d like. I know that Dave will take good care of you. Now I am again, head and shoulders above any other advisor out there. That’s really interesting.

Steven (09:36):

Okay, so let’s talk about the first time you went and talked to Dave, the CPA. So he said, yes, come pay me for an hour of my time. You send him these questions and now he’s already seen the questions you get there. Talk to me about what some of those questions are and how that meeting flows.

Matt (09:49):

Yeah, so when I get there, the very first thing I do is thank Dave for his time, and I set a check down on his desk for whatever his hourly fee was, and if by some chance I didn’t know what it was, then I have a check and the dollar amount’s not filled in yet, and I say, Hey, Dave, as promised I want to pay for this time. Here’s my check. Sometimes they’ll take it, sometimes they won’t. That’s really not the point. The point is that I’m starting right away. I said I was going to do this and I did this. I also show up of course, exactly on time. I would never show up late. So I want to start setting these expectations that I am a person of my word, that I do what I say I’m going to do, and then we jump into, oh, well, I always say, Dave, here’s your check, blah, blah, blah. I’ve got this list of questions, but before I jump into those, just anything you’d like to ask me or anything that we need to talk about before we jump into this list of questions. They’re used to being in control and I want to see to them the control of that meeting.

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Steven (11:52):

Have you ever gotten any interesting questions that surprised you right out of the gate?

Matt (11:53):

 I’ve gotten several, especially from the more jaded or the more experienced, like, what the hell is this? Why would you pay for my time? What’s going on here? And I just tell ’em right out of the gate, just like I’ve already explained, Hey, I’m looking for someone to whom I can send clients, and that’s it. That’s usually the end of the resistance. Partly they’re just so curious about why it’d be they’re fascinated at this idea.

Steven (12:16):

Yeah, no one’s ever offered to do that for me. I would probably have some hesitancy coming in, but now you’ve got an hour of their time to prove that skepticism wrong.

Matt (12:24):

Now, the advisor that taught me to do this guy, Ray Adams, great guy, he told me, he says, when the CPA asks him why he is there, he says, you know what? I paid for this time. If I want to stand on your desk and yodel, that’s up to me, which I thought was very funny. I don’t recommend that approach. That’s not a good use of your time. But then I start, I have the questions out on a piece of paper and I’m taking notes and I just start asking them the questions, and we walk all the way through. I then make sure that I’m done with my questions in about 30 minutes. I’m kind of keeping an eye on the time because I want some time for just general chitchat. I want to know about their family. I want to know about why they’re in business, and I’ve already done my research ahead of time.

(13:00):

I know everything I can possibly Google about them. But then I always want a few minutes at the end and say, Hey, listen, I just want you to know what happens when people call us and want to know about our firm, how we help them make an educated and informed decision about our firm. I don’t lead with, Hey, when you send us referrals, that’s insulting. I just lead with, Hey, I want you to understand how our process works different than a lot of firms. Steven, this goes back to your question or your point about, Hey, if I send an advisor referral, I don’t even know what’s going to happen.

Steven (13:25):

So then you describe this process for what’s going to happen, and you’re telling me you still at no point ask for referral. You’re not describing this process and then say, okay, Dave, that’s how the process works. We’d love to try it out with one of your clients.

Matt (13:35):

Nope, not at all, because that’s going to be totally insulting to them. One, if the roles were reversed, I would say, sorry, Steve, I don’t have anybody for, you’ll think about it, but now I’m on the defensive. I don’t want them on the defensive. I mean, they’re going to be on the defensive already. I don’t want to give them any reason to be more defensive. What I’ll end with is, Hey, Steven, I’d love to check in with you every couple of months when I have a tax question or when I have a client situation I’d like to review. Is it okay if I just call you when those happen? I again, I’ll pay for an hour of your time, or I’ll mention at that point, Steven, or I’d be glad to buy you lunch. Now, we already have this rapport, we have this relationship, and then I find a reason every three or four months to get ahold of them. For example, we’re in the process of contacting all of our centers of influence right now, asking them for an hour of their time that we’ll pay for to review a value add that we’re sending out to clients, and we’re going to say, Hey, listen, you deal with a lot of the same clients that we do. We want your professional opinion on this piece and how we can make it more valuable, and it gives us an excuse to get in front of them.

Steven (14:28):

So Matt, talk a little more about that value add, because I know this is a hard thing for me when I’m trying to work with centers of influence. I feel like, especially for a CPA, I’m pretty personable. I can make a good first impression, but sometimes it can feel like a stretch of, okay, I’m reaching back out to you. I’m reaching back out to you to try to keep me top of mind. What do I put in front of them? So talk about that value add you mentioned.

Matt (14:48):

Sure. So stuff I’ll put in front of ’em. Anytime we’re doing a client, a client education event or a client appreciation event, I’ll call the center of influence and say, Hey, we’ve got some extra tickets to this love to have you attend. Love to be able to introduce you to some of our clients, letting them know why it’s in there benefit. The value add that we’re working on right now is helping clients understand how their beneficiaries work, and that’s a whole podcast on its own, but CPAs and attorneys deal with beneficiaries all the time when people die or different issues tax planning. And so we show them this beneficiary value add and say, Hey, how could we make it better? What can we as financial advisors do to make your job easier? Which usually as an advisor, you’re in the job, the role of making their job more difficult. You’ve done a Roth conversion or you’ve harvested capital gains, and the CPA has to be the bearer of bad news that the client owes $20,000.

Steven (15:34):

And that’s definitely a whole nother podcast episode and maybe we’ll have you back at some point to talk about that. Love to. So Matt, one of the things I love that you’re describing is that you’re really getting at what’s going to happen to somebody I refer to you and not just trying to convince me to like you. Because when I think about other services or products that I buy and those places that constantly ask me for referrals, I don’t ever send ’em referrals whether I like ’em or not, because this isn’t a, Hey, I think Matt’s a good guy, so maybe I’ll help ’em out by sending him business. That’s not how this works. And so I like that your approach, why I’m such a great person, what’s going to happen to the clients you refer to me. And then at no point you’re actually asking for clients, then I don’t have to be on the defensive of here’s why I shouldn’t send them any of my current clients. I’m thinking about when these opportunities come up. Oh, Matt would be a good person to take care of this.

Matt (16:25):

Oh, for sure, for sure. Well, and this could go into a whole marketing discussion, a mistake that all professionals really just everyone makes in general is they say all the same things that everyone else is saying, right? So they sit down with the CPA and they say, Hey, I provide comprehensive financial planning. Perfect. Who comes in saying that? They don’t. I’m honest and hardworking. Great. Who comes in and says that they’re a lazy bum who lies with their clients. That’s like me telling you, Hey, guess what? We have electricity at our office. That’s not a selling point. That’s not a benefit that resonates. When I walk through and I’ve done this thorough interview, wow, Matt’s the only guy that was really interested if I was doing a good job versus just sending me referrals and hopes that I would reciprocate.

Steven (17:02):

Yeah. The other one I hear from financial advisors is, I’m a fiduciary. I act in the best interest of my clients. And I’m thinking, yeah, me too. I’m a professional. Why wouldn’t I act in the best interest of my clients? The fact that that’s what you lead with, it’s like, well, do you have anything else to offer or you’re just going to try your best?

Matt (17:19):

Yeah, totally. No, it’s a critical thing. In A CPA, any center of influence, they’re being bombarded by other advisors, by the copy machine sales person. Their life is busy with solicitations. I have to stand out from that entire crowd and offering to pay for their time. Now, I do have to warn advisors, listen this, I’ve run into this before. As I teach advisors this strategy on The Perfect RIA podcast, they’ll call me and they’ll say, Matthew, I paid for four CPAs time and they didn’t send me any referrals. Yes, exactly. They didn’t. This is a long game. This is a relationship business. Odds are the CPAs worked with his or her clients for years, maybe decades. They’re not going to just start sending people to you because you sat down in their office one time. This is something that you’ve got to work on again and again and again.

Steven (18:02):

Okay Matt, so earlier you said that you should only take advice from people who are doing not just theorizing. So pull back the curtain for us a little bit. Tell me about what this actually looks like when Dave sends you a referral. Because right now it just seems like here’s this great approach and then magic happens and then you have referrals. So give me an example.

Matt (18:19):

Yeah. It took me about a year of consistently working on this strategy for it to start delivering results, and now about one third of my new clients, so about five to 10 million a year of new assets comes from center of influences, primarily CPAs, some estate planning attorneys, and at this point, they usually just tell their client, Hey, listen, I see that you’re getting close to retirement. This guy, Matt specializes in retirement. You need to give him a call. And that’s usually the extent of the introduction. Then I get a call. I don’t know that it happens until the prospect calls me and says, Hey, I work with Dave CPA, they said I should talk to you. When can I meet with you? And we all know this, it’s so great to get a referral because there’s already trust built in there, but never have I had a CPA call me and say, Hey, you should call Larry my client. They give Larry my name, and Larry either calls me or doesn’t.

Steven (19:02):

Okay. So you don’t get a year into working with Dave, the CPA, and then say, Hey Dave, here’s the process for how you’re going to send me referrals. You’re letting this happen organically.

Matt (19:11):

That’s correct. Now, when I meet with the CPA throughout the year, I’m definitely making it as easy as possible. So for example, I might end one meeting share, Hey, here’s a one page financial plan that we did for a prospect recently. Love to pay for an hour of your time to walk through this to see if you think I missed anything or where I can improve. Now I’m demonstrating for them my one page financial plan demonstrating my value add, my retirement income guardrails, whatever the tool is, I’m going to them as a fellow professional saying, Hey, I would like your advice on this. How do I make this more valuable for our mutual clients?

Steven (19:42):

Wow, that’s great advice, Matt. So one of the things we want to do is make sure that this information is all really actionable. So can we take a couple minutes to talk about what advisors should do as a result of listening to this podcast?

Matt (19:54):

Yeah, I’d love to. I would say first and foremost, swear to yourself that you will never again ask a center of influence or really anybody, but we’re talking about centers of influence that you’ll never again ask for a referral. It’s insulting and it puts you in the same bucket as every other person from the used car salesperson to the timeshare salesperson. Professionals. Don’t ask each other for referrals. Professionals deliver massive value, and then when it’s a fit, referrals happen.

Steven (20:18):

I like that. That’s great. One of the action items I’d recommend out of what you’re talking about is for every advisor to start a list of the CPAs that they want to be working with. And you mentioned that you should find people that are in your same niche. So can you maybe talk for a second about how you identified what CPAs to work with?

Matt (20:34):

Yeah, this is really critical. A lot of times advisors will look for centers of influence who I’m going to call look like them. So this is not like a racial profiling, but it’s like if I’m young, I want CPAs that are young. What you want are centers of influence that look or meet the same avatar as your target market. So my target market are retirees in my geographical area. Therefore, I want to find the most mature aka closest to retirement CPAs that I can for a couple of reasons. One, retirement is on their mind, but also odds are their clients look like them. Their clients are of their age demographic, so their clients are approaching retirement. If my niche, however, was young dentist coming out of college, then I would want to find a younger CPA who’s likely working with a younger group. So you want to ideally work with whoever looks like your niche, but if that’s not an option, just talk to everybody. There’s no harm in getting the reps in.

Steven (21:23):

The other thing you can certainly do is look at who your clients are already using.

Matt (21:27):

Oh, for sure.

Steven (21:28):

And the best way to do that is to get your clients’ tax returns, and we’ll do a whole other episode on why you should be getting all of your clients and prospects tax returns. But it’s going to list who their tax preparer is, and then you instantly know this is someone who works with clients similar to mine.

Matt (21:41):

Yeah. Yep. And that’s a whole other discussion. How do you support mutual clients between you and the center of influence? We’ll have to have a whole podcast episode on that. Definitely.

Steven (21:51):

So Matt, if I can, the other action item I would love to give to the podcast listeners is if they could send me an email, could I get them your list of CPA questions so they have a starting point?

Matt (22:02):

Yeah, I’d be glad to do that. I don’t usually give that out except for my coaching members. But yeah, since you had me on your podcast, that’d be great too. So I will get you the list of questions we ask our CPA center of influences, and yeah, you’re welcome to give that out to all your listeners.

Steven (22:14):

Perfect. So if you’re listening to this podcast and would love to see that list of questions, go ahead and send us an email at advisors@rts.tax. You guys have a tax domain, that’s pretty cool. Yes. Don’t add.com. At the end of it, it’s RTS . Tax, which I’m pretty excited about.

Matt (22:31):

Perfect. Well, Steven, thanks so much for having me on the show. I hope this helps out a lot of your listeners.