[IMGCAP(1)]The very first mistake that many CPA financial planners make is something that sticks with them forever, and so is very difficult to change later as their business and client base matures. This grave mistake is with the client selection process.

Frequently satisfied by merchandising low-ticket items like 1040 preparation, CPAs think that any client who can fog a mirror may be a good PFP client. Even worse, CPAs also feel that it is best to start their PFP service offering with their small clients until they know more about the various subject matters.

Starting with the smaller clients is disastrous on many counts. The first is sheer scale. There is no scale in serving your smaller clients. The PFP process is time-consuming and a comprehensive plan may take nearly as long to complete for a small client as for one who really needs your help. The second is that of need. Many of your smaller clients don't need the expertise of a CPA PFP and can get by with a simpler offering from a less sophisticated firm than yours.

Client satisfaction and loyalty play a large role. When I ran my accounting firm over 20 years ago, it was the smaller clients who always thought that our fees were too high. They too were the ones who demanded more time, without paying, on issues such as IRS correspondence, as well as other issues incidental to tax preparation.

The larger, better clients are the ones who would prefer to have more of your time, and who are willing and able to pay for those additional resources. For me, it was the realization early on that spending more time with those ideal clients and less time with the smaller clients was the key to enjoying my days, and consequently my whole career in public accounting.

Many CPAs feel an obligation to serve anyone who shows up, and as a result, their lives, businesses and incomes have not been upgraded by adding a financial services component to their firm.



Now that you know who shouldn't be your client, let's talk about those who deserve to be your client. For me, this decision tree always starts with qualitative characteristics. Characteristics such as likability, openness to becoming an advocate for the firm, and discovering the client who can truly benefit from working with us on this higher mission are common in ideal clients. The higher mission is to tailor strategies to manage their financial future, and communicate in plain English on a regular basis. When the right mix of need, personality and a desire to delegate are present, lifelong relationships are easier to foster.

Likability sounds easy enough, yet few CPAs end their day with a glow of satisfaction that comes from serving truly likeable clients. For me, this characteristic came early as I introspectively examined my days -- both the good ones and the bad ones. What came through clear as a bell was that most bad days were accompanied by working with clients who simply weren't likeable. Their curmudgeonly style made me wonder if anyone liked them, because they routinely ruined my day and the days of my staff. The good days, on the other hand, passed so fast that I hardly had time to examine why they felt so good. But eventually I discovered that when I worked with my favorite clients, the time whizzed by as if I were at a family holiday gathering.

Starting two decades ago, I adopted a no-jerk rule for clients and staff, and haven't looked back since. Of course, a few have slipped through the cracks over the years, but once you recognize this problem it is easily rectified if you are committed to stand by your mission to make the best from every day in your life.



Not every client becomes a raving fan in terms of warm introductions to others like themselves who may benefit from your PFP services. Over time, the process of doing a great job for likeable clients will result in introductions if you provide the opportunity for it to happen. Most CPAs give themselves low grades as a salesman -- so warm introductions are critical when reproducing your best clients.

Sometimes it is as simple as asking. But other times it will require prodding through meaningful client events where your best clients bring guests and maybe even suggesting to clients how they can make quality introductions for you. Get good at this process and you'll have a steady flow of "A" clients asking to work with you.

Creating value for your clients is undoubtedly the most important criteria for a great long-term client relationship. If there is no need, perceived or genuine, there is a low probability that this client will be a good PFP addition to your firm. If the client is well-served by others or simply doesn't feel the need or desire for your PFP services, don't force an engagement. Forced engagements will regularly end up with unsatisfied clients who will not help build your business and add to the inherent misery of serving unsatisfied clients. Stay in front of these clients with your other services, and stand ready to serve as soon as they may be ready to work with you on PFP matters.

On the quantitative side, I believe that you start with your most complicated clients. Typically the most complicated clients have more issues and a larger contingent of other professionals than the less complicated client. These are the ones who relish great advice, and are willing to pay for great service. Sometimes complexity is from size, and other times it is from a wide array of issues, such as business makeup, assets, family, health or a number of other possible complicating factors. Perhaps the best client has a combination of both size and issues that drive complexity.

There are many ways to decide if the client fits the quantitative side. It can be based on assets, minimum fees, net worth, and other facts and circumstances. I am an advocate of having a minimum client size. Again, this is something that many CPAs simply can't get their arms around. I've witnessed many CPA planners dubiously asking whether other colleagues stuck to a minimum client size. In some of the wealthiest communities in the country, CPAs are merchandising services to their small clients instead of serving those with the greatest need. Every firm needs to learn the power of minimum service level and client size, and starting at the top if they want to get to the top.



Depending on the size of your firm, you may want to draw a hard line in the sand. This line in the sand becomes your boundary for who you'll serve and who you'll refer to others. If you are not with a large firm, and most readers of this column are not, this concept could be a game-changer.

The line in the sand is simple. No one becomes your client unless they meet your minimum criteria. That minimum may be a combination of size and services. For example, how many new clients did you accept last tax season that were for 1040 preparation only? For a smalI accounting practice looking to go deeper into wealth management, the answer should be zero. This is especially true if you had a grueling tax season with late nights and weekends ruined through April 15.

Ask yourself this question: How many 1040 clients do you need to generate $25,000 in fees annually? One $2 million planning client should deliver that amount of revenue each and every year in a well-run wealth management practice. Why would you want 50 new clients when only one client, happy to pay for the expanded service, could deliver the same amount of revenue?

It is hard to turn away non-ideal clients, but to build a great business you will have to either turn them away or hire more staff so that your involvement is minimal to none. The only exception may be immediate family of your ideal clients; if it is important to your ideal client that their immediate family is well-served, than it should be important to you. When a less-than-ideal client finds you on their own, it should be easy to refer them to someone who can better serve their needs. But when they come as referrals from your valuable centers of influence and ideal clients themselves, you have an opportunity to re-set the stage about who is best served by your firm. This may cause some stress in the short term, but done timely and professionally, this will help you in the long run.

These concepts are not something for you to learn and get better at next year. These actionable items should start with your next inbound phone call from a prospective client. If you have some pent-up demand for PFP services from tax season, or recognized those clients who may benefit from your upgraded PFP services, make sure today that you reach out to set your first round of meetings with the right clients.

John P. Napolitano, CFP, CPA, PFS, MST, is CEO of U.S. Wealth Management in Braintree, Mass. Reach him at (781) 849-9200.

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