Collaboration is the Secret to Smart Retirement Tax Planning

Learn more about how to build strong, mutually beneficial relationships with your clients' CPAs in this month's FinPlan Friday conversation with Joe.

March 2022 FinPlanFriday

FinPlan Fridays

In our video blog series, FinPlan Fridays, Covisum® Founder, and President Joe Elsasser, CFP®, offers his take on the issues financial advisors see every day. Joe is a practicing financial planner with a unique perspective on industry challenges. Join us on the first Friday of every month for FinPlan Fridays and get helpful tips to grow your financial planning practice. 



I'm Joe Elsasser, CFP®, Founder and President of Covisum®, and I'm also a practicing financial advisor. Welcome to another FinPlan Friday. Today we're talking about how to create a referral relationship with your clients' CPAs. As a financial advisor, a CPA relationship (or several CPA relationships) can be some of the most valuable connections we build because:

  • Our clients benefit. A good relationship can help our clients with those sticky tax questions, which are tax advice and not just a financial planning decision.
  • Our business benefits. CPAs can be important centers of influence. As advisors, we fill a gap that CPAs generally can't afford to fill.

How can advisors add value to their clients' CPAs?

Most CPAs don't make their money off of typical consumer tax returns. They make their money working with business entities and complex structures. That's where the additional education that a CPA has comes into play. So consider a typical client coming from a financial advisor who has $1 million or $2 million in their retirement accounts but doesn't have any other complexities. 

Imagine that this client asks their CPA, "should I do a Roth conversion?" 

Responding can be a challenge for the CPA. They don't know whether or not they're going to find a result, and it's going to take them some time to dig in and find out. They may discover that they are not able to recommend a Roth conversion. That's a lose-lose scenario for the CPA. They risk losing the client because they bill them but don't find anything, or they risk not billing them. In which case, they gave work away for free. 

Here's the opportunity as advisors. We fill a valuable role for CPAs, identifying Roth conversion opportunities and helping to answer the question of which account the client should be using at specific points in retirement to create tax efficiency. That's a real value to CPAs. 

Make Roth conversions easier and sign up for a free trial of Tax Clarity and Income InSight.


When is the best time to be reaching out to CPAs?

It certainly is not February through May or in the early fall. That's when the typical CPA works 50-70 hours per week. Some of them considerably more if they're a tax-oriented CPA. So during those windows of time, my financial planning practice does relationship-building things. For example, their busy time is perfect to deliver a catered lunch to their office. No strings attached. 

Another tip: don't call them on the phone. Instead, send a note with lunch so that your CPA prospects know it's from you. Our firm does a cookie drop-off. You know, a little extra sugar always helps through a tough season.

During the rest of the year, focus on proactive outreach. Explain what you do and how it compliments your CPA prospects' services. Understand their niche. Who is their ideal client? 

For example, they may specialize in software as a service or manufacturing companies. Those are different areas of expertise. 

Some of your more complex business cases may require the advice of a CPA, so knowing which CPA to refer based on their expertise is another point of value.

Ultimately, reaching out to CPAs between February and May is generally a bad idea, unless it's to make their life easier, like proactively providing forms from clients or doing a friendly little outreach like sandwiches or cookies. But proactive outreach during the rest of the year to explain the role you can play to lighten their load and understand where they're at and which clients are the best fit for them can be highly valuable.


Tax Clarity

In Tax Clarity®, there is a template for a CPA intro letter. It outlines that you have a mutual client, and at some point in the next few weeks, you will reach out. It's a great way to get started. So, suppose you're already a Tax Clarity subscriber. In that case, you can download that as part of the marketing resources. And if you're not a Tax Clarity subscriber, it's a great reason to get familiar with Tax Clarity. It'll help you grow your business and help you interact with your clients' CPAs. 

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