Developing a successful Financial Services practice

THE TAX ADVISOR AS PRIMARY FINANCIAL ADVISOR (PFA)

The opportunity for tax advisors to serve in the role of PFA and build value for their existing clients has been recognized by the American Institute of Certified Public Accountants CPA's Vision 2000 initiative as one of the top growth areas for practitioners in the coming years. As well, Dalbar, Inc., the market research firm, projects the growth for non-tax based financial services to continue at 20% per annum for the next 15 years.

Clients, consumers, and closely-held businesses frequently choose the tax advisor as PFA. Four distinct qualities support consumers' choice for the tax professional to guide them in the implementation of their financial plan. These qualities are knowledge of the client, objectivity in analysis of plans and products, up-to-date on income tax and estate tax matters, and trustworthiness. As consumers' income level and net worth increase, there is an increase in the choice of the tax advisor as PFA relative to any other advisor, i.e. banker, stockbroker, life agent, friend, relative.

STEPS TO PROFITABLY AND SUCCESSFULLY INTEGRATING THE PLAN

As your partner, Signature Advisors Group can help you profitably and successfully integrate one-stop-shopping for comprehensive financial services into your practice. Our expertise as experienced financial service providers to tax professionals will allow us to help you streamline licensing, service and product education, completing successful client engagements, and structuring a professional marketing process for your firm. The end result will be a sustainable process that defines you or your firm's culture while profitably growing your comprehensive financial services practice in an organized manner.

The necessary components of a business plan to profitably integrate comprehensive financial planning into your practice include the following:

  • Determine the partner/senior staff member who will manage and lead the firm's comprehensive financial planning practice.
  • The designated firm member completes the "Checklist for Getting Started" and returns completed checklist to SAG.
  • SAG returns exam study material and sets exam dates for partner/senior staff member.
  • Designated firm member reviews study materials and sits for appropriate Securities, Investment Advisor and Insurance exams.
  • After successful completion of the required examinations, the designated firm member executes the SAG affiliate agreement.
  • Develop a comprehensive marketing strategy and establish realistic goals for the firm. Begin conducting client communications regarding the expansion of services being offered.
  • Establish a separate legal entity through which to conduct the financial services business if necessary.
  • Designated firm member participates in ongoing training to further develop skills and knowledge of financial services and products.

Determine the partner/senior staff member who will manage and lead the firm's comprehensive financial planning practice

  • SAG can help you determine the services you wish to provide and the necessary licensing and regulatory requirements based on the needs of your firm.
  • SAG will coordinate with you to help determine which partner/senior staff member(s) should be licensed.

The designated firm member completes the "Checklist for Getting Started" and returns completed checklist to SAG

  • The "Checklist for Getting Started" is a comprehensive start-to-finish process that will assure all necessary pre-licensing requirements are completed by the designated firm member.
  • SAG licensing coordinator will be available to answer any questions you may have regarding completion of the checklist.

SAG returns exam study material and sets exam dates for partner/senior staff member

  • SAG will return all necessary study materials to the designated firm member for Securities, RIA, and Insurance licensing.
  • SAG has negotiated favorable study material costs for your benefit with a nationally recognized provider of pre-licensing training.
  • Designated firm member should allocate sufficient time to study for selected exams. Each exam will indicate guideline study time recommendations

Designated firm member reviews study materials and sits for appropriate Securities, Investment Advisor and Insurance exams

  • Each exam will allow 1 1/2 to 3 hours for completion depending on the specific exam.
  • The designated firm member being examined will receive a pass/fail result immediately following the completion of the exam. These results should be faxed to SAG within 48 hours.

After successful completion of the required examinations, the designated firm member executes the SAG affiliate agreement

  • SAG will supply you with a copy of our affiliate agreement for review.
  • After review and execution of the agreement, you may begin to communicate with your clients regarding the additional comprehensive financial services your firm offers. SAG can assist you in the development of business cards and stationery to be used in the conduct of your financial services business.

Develop a comprehensive marketing strategy and establish realistic goals for the firm. Begin conducting client communications regarding the expansion of securities being offered

  • Industry research indicates tax practitioners are capable of introducing several clients into the financial planning process each month. Therefore, at a minimum, benchmark goals should be focused on the introduction of at least one client, per licensed firm member, per month into the financial planning process.
  • Firms can expect to generate significant revenue in their first year. SAG will vigorously support each licensed member's activities to achieve their targeted standards of success and profitability.
  • SAG will provide support and assistance to each affiliate in determining the most effective marketing strategy. Such analysis will determine which strategies should be incorporated to profitably grow the firm's comprehensive financial services practice.

The following options are available for consideration in the development of a communication and marketing strategy for the firm's client base:

  • SAG will provide a client brochure, free of charge, which can be imprinted with the firm's name, address and logo and distributed among clients. To create awareness within the client base, we recommend that the brochure should be distributed to each client three times within the first 18 months following licensure, and at least annually thereafter. The brochure can be included in routine firm mailings such as the annual tax organizer or newsletter. Initially the brochure should also be sent to all clients in an introductory mailing explaining the firm's expanded services. We also suggest that a supply of brochures be available in the firm's lobby.
  • Immediately after becoming affiliated with SAG, the designated firm member should review the existing client base to identify a number of high potential opportunities to begin offering the newly expanded services. Strategies for identifying appropriate opportunities include using a financial planning checklist to review client 1040's, identifying clients who have requested such services in the past and targeting business clients in need of either a management succession plan or an employee retirement plan. Your SAG representative can provide appropriate checklists and work with you to identify opportunities and determine how best to approach clients with the new service offering. We recommend that the review of existing clients for planning opportunities be repeated annually, generally at the close of the income tax filing season.
  • An analysis of the client base can be conducted to identify market segments such as the owners of private companies, individuals with college-bound children or affluent retirees, or lines of business such as contractors, physicians, manufacturers, etc. that are particularly well represented. If a significant enough concentration in one or more of these niches is identified, it may be productive to purchase targeted newsletters with topic specific information which can be systematically distributed among segments of the client base as a means of generating interest in additional planning engagements.
  • All members of the firm must become familiar with the range of services being offered and instructed to remain attuned to the opportunity to discuss these securities with clients whenever possible. Some firms have experienced positive results by incorporating the measurement of staff and partner performance in the identification of financial planning opportunities into the firm's formal performance review process.
  • If a firm newsletter is being used currently, a financial planning column should be included regularly to continually remind clients, in a subtle manner, of the range of services the firm offers. If newsletters are not being used, such an approach should be considered. A number of third party vendors offer reasonably priced financial and business planning newsletters which can be customized with the firm name and logo.
  • A financial planning checklist or questionnaire should be incorporated into the annual tax organizer as a means to allow clients to indicate their level of interest in various topics. Positive responses should be identified and the clients followed up with promptly. Many tax preparation software packages permit queries to be run which can also identify clients who may be responsive to financial planning services such as clients who have changed jobs or retired, clients who have moved, clients who have added dependents, etc.
  • Topic-specific seminars and workshops are also an effective, non-threatening way to communicate business and financial planning needs and solutions to clients. Seminars are most effective when used as a complement to other routine marketing activities. SAG can provide support and design assistance in the development of client seminars.
  • Additionally, traditional marketing activities such as public speaking, maintaining an active presence in charitable and civic organizations and encouraging referrals from present clients can all be useful means of introducing new clients to the firm. Including a discussion of the firm's comprehensive financial services practice in the introductory interview can be effective in differentiating the firm from others being considered by the prospective client.

In summary it is important to remember that effective marketing and practice development is a process rather than an event. Our affiliates have experienced the greatest success in building their financial services practice when their practice development activities have been conducted in a low-key manner over a sustained period of time. Many clients need to be reminded and encouraged for a period of a year or more before they will take action and engage in appropriate planning activities. Furthermore, the entire client base must be made aware of the services being offered so that when financial needs arise in the future, these clients turn to their tax advisor first in seeking assistance.