Location: Melville, N.Y.
Assets under Management: $500 million plus
Production: $5 million
Expertise: CPAs
Some advisors make teaming up with CPAs look so easy. Jonathan Kuttin is one of them. But a successful partnership doesn't happen overnight. Kuttin found it takes time and energy to build up the relationship to a point where you'll see a bump in revenue. The FA and the CPA have to overcome cultural differences, false perceptions about how the other runs his business, and marketing hurdles.
“Working with a CPA is not a sprint; it's a marathon,” says Kuttin, an Ameriprise Financial advisor who teamed up with a CPA, Ken Cerini, in 2002. Cerini's clients were demanding financial planning services, so he started interviewing FAs he could partner with. Kuttin fit the bill. So Cerini became licensed through Ameriprise, and the two set up a revenue-sharing agreement on referred clients.
At first, the way Cerini gave referrals to his clients was not very effective; he would simply give them Kuttin's business card. “No one would ever call me,” Kuttin says. He coached Cerini to call him while he was sitting down with clients and schedule a meeting with the two of them. After that, Kuttin started to set up a lot of appointments with prospective clients.
“What you find is that most accountants are not strong from a marketing perspective,” Cerini admits. But through his relationship with Kuttin, he learned techniques for more effective marketing and improved networking. For example, Kuttin helped Cerini's accounting firm launch its first annual client appreciation event.
Kuttin also had to educate Cerini about what his firm does, in order to get past the perceptions many CPAs have about the advisory space. CPAs often don't realize that many financial advisors do comprehensive, fee-based financial planning, Kuttin says. “Because they don't understand what we do, I think they throw financial advisors more into a pot of product salespeople.” Once he educated Cerini about the business, Cerini could see how it would be beneficial to his accounting clients, he says.
And this was Cerini's first priority — to make sure his clients were going to be taken care of. In particular, he wanted to make sure the FA communicated with him about the tax ramifications in his clients' portfolios. “I could tell you all sorts of horror stories about how someone comes in to have their taxes done, and you're looking at stuff and you ask, ‘Your advisor did this?’”
The CPA-FA relationship takes work, as it did for Kuttin and Cerini. But Kuttin found that once you overcome those hurdles and build up a strong relationship, it can pay off. Now, his firm brings on 15 to 20 new clients a year on average. Since 2002, Cerini has referred 165 clients and over $44 million in assets.
That said, it wasn't a home run. Not all of Cerini's clients are working with Kuttin's firm, and some clients went to work with Kuttin but later decided it wasn't the right fit.