Count on accountants when building your high-net-worth client base

(May 14, 2003) Want to develop your high-net-worth (HNW) client base fast? “A lot of people don’t have 30 years to build a relationship with [someone like] Ted Rogers,” says Kurt Rosentreter, so he recommends spending $10,000 a year on two accountants, an investment that will net you more wealthy clients “than you will ever need.”

Speaking at the Strategy Institute’s Elite Advisor Summit last week in Kleinburg, Ontario, Rosentreter, a senior financial advisor with Berkshire Securities in Toronto, presented a simple idea for getting HNW referrals from accountants: Never ask them for leads. Instead, Rosentreter told his audience to first become a client of an accountant — or several accountants. “Hire four [accountants] for yourself,” said Rosentreter. “Then you have four relationships and they won’t suspect a thing.”

Once you’ve become the client of a few accountants and used your skill to turn them into your own clients, you can wow them with your service and expertise, Rosentreter says. That will result in them referring clients to you.

One key to deepening your relationships with accountants is to be mindful of the nature of the work you send their way. Rosentreter noted that lawyers don’t want to do more wills and accountants don’t want to do more personal tax returns — they crave the same kind of challenging work advisors do. If you give it to them, you will be noticed.

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Rosentreter also advised appealing to an accountant’s analytical side. Small-business prospects may like two-page proposals, but always give an accountant the 20-page detailed report.

How do you determine what accountants to pursue? Rosentreter suggested targeting small accounting firms and cultivating a relationship with the one or two partners with the greatest influence at each firm. Finding these “rainmakers” is as easy as asking the receptionist which partners take the most lunches out of the office.

If you think the risk of working with a financial advisor will outweigh the benefits for the accountants you want to work with, Rosentreter pointed out that in the U.S., accountants are now thick into the investment business — a situation that many believe will develop in Canada in the foreseeable future. And few accountants know much about investments or personal finance.

Targeting accountants was not the only practical strategy Rosentreter highlighted to help advisors cross the difficult threshold into the affluent market. He also covered everything from branding yourself to understanding the needs of small business owners, many of whom have outgrown their generalist advisor and need to be shown that their loyalty is costing them money.

Advisor.ca will have more coverage of the Elite Advisor summit later this week.

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Need more information on the HNW market and how advisors are tapping into it successfully? Then click here to search the Advisor.ca Web site by plugging in the acronym “HNW” and see our full complement of articles on this market. Still not enough information? Don’t forget to search the Advisor’s Edge archives, as well, by clicking here.

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Donna Green, MA, CFP, is a personal finance writer and assistant author of The New Investment Frontier, A Guide to Exchange Traded Funds for Canadians, and Surprise! You’re Wealthy: A Woman’s Guide to Protecting Her Wealth.

(05/14/03)