A proven way for wealth managers to get a steady stream of affluent clients from accountants is … to help them build $5 million or more individual practices.
Few individual accountants have built practices that generate at least $5 million annually. While there are various ways to reach this lofty achievement, a number of common best practices appear among those that have. By sharing these best practices and facilitating the processes, wealth managers have been able to significantly increase the high-net-worth referrals they get from accountants.
The majority of accountants do not break the million-dollar mark when it comes to annual net revenues. A smaller percentage can produce between $1 million and $2 million each year. The number of accountants able to bring in more than $2 million in net revenues is even lower. Few individual accountants are able to consistently drive more than $5 million net revenues annually to their firms.
While the size of the accounting firm, as measured by number of accountants or overall revenues, can have an impact, it is rarely the most critical factor. Accountants in small firms have the potential to build individual practices that produce $5 million or more in annual revenues. These successful accountants share many similar characteristics, including the following:
• They have the infrastructure in place resulting in other professionals being instrumental in servicing clients. If the accountant is not able to leverage others, then it is improbable that he or she has the bandwidth required to build a $5 million annual practice.
• The practice area the accountant is working in potentially has significant margins. Certain practice areas have margins that can conceivably result in superior revenues. Well-run family office practices, for example, have margins that can range from 40 percent to 75 percent depending on the expertise provided.
• The clientele can often provide substantial new business opportunities. Certain types of clients can be great sources of new business because of cross-selling opportunities and referrals. Entrepreneur clients, for instance, can generate substantial revenues for multiple types of practices.
Being a thought leader is instrumental to accountants with $5 million individual practices. Clients, prospects and other professionals recognize these accountants as experts, meaning thought leaders are able to monetize their positioning.
A growing number of extremely successful wealth managers are working to help talented and capable accountants, who are not seen as thought leaders, to become the experts that clients want. These are some of the ways wealth managers are facilitating the process:
• Curating high-quality thought leadership content that accountants can use to help position themselves as top-of-the-line experts.
• Working with accountants to determine whom to provide the thought leadership content to and how to most effectively follow up.
• Teaching accounts how to use high-quality thought leadership content to increase referrals.
Without question, even in an increasingly hyper-competitive accounting industry, there are ways accountants can become exceptionally successful. Wealth managers who can help accountants build more profitable practices are regularly rewarded with more and usually wealthier client referrals.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.
