What CPAs Should Do At The First Financial Planning Meeting
More than most accounting professionals, CPA financial planners delve into the smallest details of their clients’ lives. In fact, for a financial planning engagement to be successful, clients must allow themselves to be vulnerable – sharing their personal and financial habits, yes, but also their hopes, dreams and goals.
The initial planning meeting is therefore a crucial time in any successful financial planning relationship. Experienced CPA financial planners share best practices to help establish you as a trusted advisor and ensure successful and productive engagement.
Put customers at ease. Your customers should be comfortable sharing with you so that you provide them with real value. For Susan Tillery, CPA / PFS, president of Paraklete Financial Inc. in Atlanta, putting her clients at ease is one of the primary goals of the initial consultation. She even refrains from glancing at their financial documents until she talks to them at length about their life. “If I can spend an hour discovering and sharing my clients, I consider it a very successful meeting,” Tillery said.
Benjamin Dorsey, CPA / PFS, director of tax strategies at Cassaday & Company in McLean, Va., Also structures the initial consultation to make sure his clients feel relaxed. “I try to keep things as informal as possible and avoid overloading them with tables and charts,” Dorsey said. “The first meeting is about building trust. “
Dorsey enjoys reading her clients’ past experiences with financial planning professionals. “I ask them if they have worked with CPAs, insurance professionals or financial advisers in the past, and whether the relationship has been successful or not,” he said. Dorsey believes that once he understands his clients’ financial planning history, he can then more effectively determine the best course of action.
Take their financial temperature. Once you’ve successfully encouraged your clients to open up about their financial lives, you can dive into their documentation. Thomas Tillery, vice president of Paraklete Financial, issues potential clients with a “shopping list” of financial documents. Customers are expected to bring 15-20 separate statements, including tax returns, bank statements, and estate documents. He then examines the information to build an understanding of a customer’s financial situation and identify their most pressing financial problem, or what he calls the “triage” event.
Often times, the triage event that it identifies is not the reason the client initially hosted the meeting. For example, he frequently finds that his clients do not have an appropriate estate plan in place. “A lot of times the client is eager to discuss their investment portfolio, but I have to tell them to create a revocable trust first,” he said.
Adjust their expectations. CPAs need to be clear about their approach to financial planning and what the client can expect from the relationship. New and potential clients should understand that the client and the CPA will need to work as a team to identify and achieve the client’s goals.
Frequently, your approach may be different from what the client initially envisioned. “Clients pay me to be an advocate and educator, not a yes,” Thomas Tillery said. He makes sure potential clients know that assignments include at least eight to ten meetings and that financial plans always require some level of modification as they progress.
Dorsey, too, finds that he often has to change his clients’ expectations. In the first meeting, Dorsey makes her client aware that her approach is focused on building a long-term stable portfolio with an emphasis on allocation. “I advise my clients against investing too much in the latest hot trend, whether it’s cryptocurrency or anything else,” Dorsey explained. “For me, it’s about hitting consistent singles and doubles rather than hitting for the home run.”
Determine if they are suitable for your practice. It is important that your client aligns with your philosophy and approach to financial planning. Thomas Tillery does this by setting “high expectations for the client as a participant in the financial planning process,” stressing that they share responsibility for its success. He makes clients aware that unexpected events may arise during the engagement, such as an economic recession or business failure, which can affect the process. He also lets them know that his job is to give them the knowledge they need to “enter into a reasoned dialogue with their advisers” and “arrive at concrete solutions”.
Some prospects find that this approach is not right for them. In fact, Thomas Tillery finds that most of the potential clients he connects with never manage to sign an engagement letter. “We find that a lot of those who show up for the initial consultation are better off working with a different kind of professional,” he said. He estimates that 35% of referrals choose to work with his company.
Susan Tillery emphasized the importance of maintaining a strong network of professionals to refer clients and prospects to. In one case, she discovered that a potential client, an employer, had significant ERISA issues. She referred the client to a trusted lawyer and advised him to prioritize resolving these issues. “The lawyer was able to deal with the issues related to ERISA, in which case I met the client again and started a productive relationship,” Tillery said.
The delicate nature of personal financial planning requires a lot of interpersonal and technical skills. Take a thoughtful and sincere approach during the initial planning meeting to get your relationship off to a good start with your potential clients.
Susan Tillery and Thomas Tillery will speak at the Workshop on setting up your tax and financial planning consulting business, held online and live in Las Vegas on July 24 and 25, ahead of AICPA and CIMA ENGAGE 2021.
AICPA & CIMA ENGAGE 2021, the premier event for accounting and finance professionals, will be a hybrid event this year. Join us at the Aria Resort and Casino in Las Vegas or online, July 26-29, for conferences and sessions on accounting and auditing; tax; Technology; leadership; personal financial planning; diversity, equity and inclusion; and more.
– Joshua Wiesenfeld, CPA, is a financial investigator at Labaton Sucharow LLP. To comment on this article, contact Courtney Vien, a JofA editor-in-chief at [email protected].