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No I won’t introduce you to all my clients

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30th Dec 2013
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If you are like most accountants you probably get approached every now and then by third parties who have a proposition for you, explains Mark Lee.

They may be financial advisers who want to work with you and to service your clients; bankers who want to help your clients; marketing folk who want to help you grow your practice; trainers who want to help you and your staff develop personal and business skills; or anyone else who has cottoned on to the idea that you are a trusted adviser to your clients. Typically the idea is that, as such, you are the ideal person to introduce a new service provider. Your recommendation will be trusted and so it should be faster to get to a large number of prospective clients via you than to approach them directly. That’s the theory anyway.

There are evidently many people who think this is a good idea. Rarely does a week go by without someone approaching me with a request or suggestion such as:

  • Where can I go to network with accountants?
  • I hear you know lots of accountants, I have this wonderful affiliate deal that could be very profitable for them
  • How can I convince accountants that my marketing ideas will really work for them?
  • I know accountants are rubbish at [a skill such as networking]. I could train them to be better and more successful
  • As you are so well connected to thousands of accountants, I am sure you will find it very profitable to promote our service to them for a commission on all sales
  • My service/product is ideal for small business owners. How can I get accountants to introduce (or recommend) me to their clients? I'll make it worth their while!

Invariably I disabuse these people and point out what I consider to be their misconceptions, their false assumptions and their lack of understanding as regards what really matters to accountants. I explain that only a small sub-set of all the local accountancy firms are likely to have an interest in such propositions.

I recently heard back from a financial adviser who had approached me for introductions to accountants a few years back. He tells me that when he reflected on my explanations he had decided NOT to approach local accountants after all.

But, what if I am wrong? There I am thinking I am saving you from having your time wasted by all these inexperienced financial advisers, bankers, trainers, marketing consultants and the like. Maybe my own assumptions are outdated. As 2013 draws to a close I thought I should double check.

Obviously there are some accountancy practices that may be interested in some of these services and opportunities. Are you among them? What characteristics do you think such firms share? I have long suggested that the majority have neither the interest nor the time to pursue many of the 'opportunities' that are offered to me to pass on or to introduce to accountants. 

Does the following analysis resonate with you? 

Typical accountancy practices

Some are start-ups, some are really growth orientated but the majority are pretty happy with their lot. 

By this I mean you feel that you are making a good enough living, you have a pretty static client base and you have no great desire to win loads more clients. This is the impression I get from many of the comments on AccountingWEB. But is that right?

I also suggest to the people who approach me that, due to the high proportion of your income that comes from recurring annual fees, you are generally reluctant to introduce your clients to third party advisers in case they mess things up for you. 

And you would rather devote time and effort to billable accountancy and tax work than to promoting a third party product or service.

I could go on (and I usually do).

The not-so typical firms and accountants

Evidently there are there some accountants who do welcome well thought through proposals from other advisers. This might be you if, for example, you are newly promoted partner and are expected to build up your portfolio by bringing in loads of new clients.

Alternatively, perhaps you are a more mature partner and you enjoy the variety of new business relationships and exploring new ideas with new business connections. It’s easier for you to do this as you have plenty of staff who are focused on the day to day work.

Then there are the marketing and business development partners – although again these tend to exist only in larger firms.

Does this resonate with you? What type of third party approaches do you welcome and why?

Mark Lee is consultant practice editor of AccountingWEB and writes the BookMarkLee blog and ebooks for accountants who want to save time and accelerate their success in practice, online and in life. He is also Chairman of the Tax Advice Network of independent tax specialists.

Replies (7)

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By carnmores
30th Dec 2013 12:12

they all want something

and most of them give [***] all back . Happy New Year Mark , keep up the good work!

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By moneymanager
30th Dec 2013 13:09

Hope you make it clear

If any accountant is in the "I know my job and that's all I'll do' camp I hope his terms of engagment make that clear. Even a well time worn phrase such as 'I think you need a pension' which does not itself consitute advice prohibited under the FSMA could quite easily come back and bite you.

I would agree with Mark that many firms have a client bank to thin or of too low grade  to warrant much attention from competent financial advisers (who have to justify their fees and costs as well you know) just as I know of others too arogant to perceive a need. On the other hand...

I worked with one sole practionner deploying highly successful income tax defferal mechanisms (plain vanila S42/44 film schemes) which provide sufficient capital to completley refurbish a property portfolio ( on which he eanred his fees)

Another using the same device to help in a complex re-financing project

Partially solved a prior accounting period corporation tax problem using a SASS pension (the accountant had correclty identified that a pension contribution could not be carried back but had not appreciated the scale of potential contributions of just under 1m therby creating a loss in teh current period.

 could bore you with many more.

The critical thing is that in every case my accountant contact had identified a problem; I identified the solution. In most cases there was no wish to receive a fee split and in today's regime I would be highly reluctant to offer one. After all a GP doesn't get a share of the surgeon's 'cut'!

Happy New Year

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By morgani
30th Dec 2013 20:53

Honest and trustworthy
To be honest I'd love to hear from an honest and trustworthy IFA, particularly for mortgages for directors and the self-employed.

I've tried lots of different ones for clients but have yet to find one they really understands it properly.

The two Scenarios I have had which they just don't get are.

1 - a foster career who may well have income of around £50k but due to allowable taxable reliefs may have a nil profit for tax purposes. They state they understand and then ask for SA302s from HMRC to confirm the income. This will just show nil!

2 - a director / shareholder of a ltd co where the one director/shareholder has just left. They were an admin role and profit will now actually increase for the company and the remaining person. They understand and again ask for an sa302 to proove the new level of income. I stress that is has happened in the last 2 months so it is not going to show on an sa302 until a full tax year is done. We go nowhere.

I could go on with more and more situations where there is a lack of understanding or honesty. I know that there are rules to follow but a simple look at the situation and a quick I can't help sorry would earn far more respect than wasting everyone's time.

So if you find one who knows what they are doing and is not up for promising the earth when they will deliver nothing then yes send them my way!

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By moneymanager
31st Dec 2013 14:28

No rudder?

Only director has just left? So the 'remaining member of staff 'and potential mortgagee is employed by a company with no director?

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By MalcyD
02nd Jan 2014 11:42

Client retention

It's about providing a full service to clients - for example, my accountant connections can provide information and guidance on pensions auto-enrolment, but are not in a position to implement the scheme review, liaise with providers, provide communication material, advise  members etc - which can be provided by a trusted partner, to ensure that the client receives a rounded service proposition.

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By morgani
02nd Jan 2014 12:37

left one
One left leaving one director in control.

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By Ken of Chester le Street
04th Jan 2014 15:40

financial advisers

My experience  may be out of date, as I retired 3 years ago, but this may help.

I was asked by a personal friend/ client for a list of clients so he could circulate them about  some issue or other. I explained that client confidentiality didn't permit me to do that.

 

I did have a financial advisor who I discovered through a mutual contact. Unlike most financial advisors he understood tax.  I used to introduce him to clients who needed investment advice, until he retired.   He used to advise me gratis on changes in investment law and practice and I used to answer his tax questions where his knowledge was not technical enough.  But I never introduced him to business the clients didn't need.

Unfortunately the layers of reporting in order to show accountability to the FSA and their successors made a practice of his size unviable. But his sucessor is pretty good.

One fairly obvious rule of thumb.  Ignore approaches from people you don't know, especially if they come in circular letters on  embossed paper. You have no idea about the firm, and they probably don't know anything about yours either.  I know that, because three years after retriement I still get them!

 

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