How many CpA alliances should a life
insurance professional have? Bill Mercer,
a pittsburgh, pa.-based general agent for
ohio national, thinks that one really good
relationship should suffice. Mercer says
his CpA partner of 20 years has sent him a
“ton of clients,” most of whom are in need
of retirement planning.
pacific Life’s Buck believes that from
three to five alliances is optimal, but observes that not all will be “primary” relationships. Those CpAs
(and estate planning
attorneys) who provide only the occasional referral may be
categorized as “
secondary” partners.
one advisor who
has more than one alliance is Mercer Morrisette Jr., a Myrtle
Beach, S.C.-based financial professional.
Mercer, who has collaborated with as many as five CpAs in
prior years (but now does business chiefly
with two) says the partnerships account
for about 40% of new business. And he
credits an initiative of his carrier, prudential Financial, newark, n.J., with helping
to give him broad exposure to CpAs in his
community.
Morrisette speaks twice yearly to more
than 150 CpAs affiliated with the South
Carolina Tax Council. Sponsored by prudential, the two-day gatherings avail him
of opportunities to discuss insurance and
financial planning topics; and to plug prudential’s 10-year old Alliance program,
which helps prudential advisors build
relationships with CpAs and other tax
preparers, plus commercial property and
casualty agents. To date, the program’s 78
advisors have developed 84 alliances.
“The alliance program lets me share
commissions with partnering CpAs,” says
Morrisette. “The terms of the partnerships are all in writing, including what’s
required of the CpAs. They must have, for
example, the same FInRA licenses I have.
When I receive a referral that leads to a
sale, I handle the paperwork and prudential cuts a commission check to the CpA.
“The arrangement has worked out very
well for the partners,” he
adds. “And it’s made a big
difference to my practice:
This week, I have 12 cli-
ent appointments that
my CpA partners set up
for me.”
To be sure, not every
tax preparer is keen to en-
ter into a revenue-shar-
ing arrangement. Case
in point: Andy Cohen, a
CpA and vice president
of norman Jones enlow,
Zanesville, ohio. Specializing in business,
estate and life planning for family-owned
and closely held firms, Cohen outsources
the implementation of plan recommen-
dations requiring the purchase of the in-
surance to one of a handful of agents
with whom he has allied informally. The
reason: By limiting compensation to fees,
Cohen avoids potential conflicts of inter-
est associated with the product sale.
In place of commission-splits, Cohen
says, he asks only that partnering advisors
provide contacts that might lead to additional corporate tax work in exchange for
the referrals he sends their way.
And those referrals are top-quality, either because the client has already bought
into Cohen’s plan recommendations
or because he’s identified the product
Too often, financial
advisors simply assume
that a CPA can effectively
describe the value they
bring to table. “It’s fine
to formalize the terms of
an alliance, but without
a business plan, the
chances of success
actually drop.”
need—thanks to an in-depth understanding of financial solutions. In addition to
being a CpA, Cohen also boasts the CLU
and ChFC designations, plus a master’s
degree in taxation.
“We encourage all of our CpAs to pursue other advanced designations and
degrees,” says Cohen, who adds the advanced training helps the firm compete
against other practices that now offer
more than tax preparation services. “Many
CpA firms of our size, those with 40 more
of professionals, have a practice unit that
is doing investment advising and that sells
insurance products,” he says.
Getting the Strategy Right
Sources say that advisors need to be patient in cultivating relationships with
potential partners. Jason Moehring, a senior financial consultant for Cornerstone
Group, a practice affiliated with Thrivent
Financial for Lutherans, Blaine, Minn.,
observes that a significant amount of retirement and investment planning has
resulted from referrals from a partnering
CpA—but only after a long period of professional courtship.
“I spent a lot of time getting to know
[the CpA], how he works with clients, and
what he is looking for when he needs
someone to turn to,” says Moehring.
“once the ground work is laid, I have to
stay in touch,” he adds. “I make sure that
I provide feedback to him on the clients
and thank him for the referrals he gives. I
also call to see what tax issues my clients
should be aware of. And I keep him current on insurance and investment trends.”
If the advisor-CpA partnership calls
only for an exchange of referrals, then the
relationship should be simple to enough
to manage. But sources caution that producers need to be able to diplomatically
