The Story of Scott: How an Accountant Missed an Opportunity
Let’s dive into a story about an accountant. This could be you if you’re an accountant today. The accountant’s best client, Scott, has been with them for 15 years. Scott’s business has been steadily growing, and now, in his mid-50s, he’s thinking about slowing down and planning for retirement.
To prepare for this next chapter, Scott brings in a business partner, Sarah, who brings new energy, fresh ideas, and valuable contacts. Together, they significantly increase the company’s revenue. As a result, Scott and Sarah both decide to raise their take-home income from $300,000 to $600,000 a year.
The Accountant’s Advice
Scott, thrilled with the new income, realizes that it will have a substantial impact on his taxes. So, he reaches out to his go-to person—his accountant. The accountant suggests that Scott talk to Matt at Defined Benefit Plans R Us, believing a defined benefit plan might help Scott save on taxes.
After meeting with Matt, Scott sets up the plan and saves $50,000 in taxes. Everyone is happy—Scott got what he wanted, and the accountant’s referral worked out. But the story doesn’t stop there.
The Missed Opportunity
A few months later, Scott is at a football game with some friends—other successful business owners, just the kind of clients you’d want to work with. During halftime, the conversation turns to business, and Scott shares his recent success story. He explains how Sarah helped grow the company and how their income jumped to $600,000.
Scott mentions his concerns about taxes and how his accountant recommended Matt for the defined benefit plan, which saved him $50,000. One of his friends is intrigued and asks for Matt’s contact information. Scott shares it, and just like that, Matt’s story gets told instead of the accountant’s.
What Went Wrong?
While Scott benefited from the defined benefit plan, several key questions were never addressed:
- Buy-Sell Agreement: Now that Sarah owns 50% of the business, what happens if something happens to her or Scott? Was a buy-sell agreement considered?
- Retirement Planning: Scott wants to retire in 5-7 years. Is that realistic? What does retirement actually look like for him?
- Employee Retention: With the rapid growth of the company, how are they handling employee retention?
- Non-Qualified Plans: With their income doubling, does Scott really need all that money to live on, or should a non-qualified plan also have been considered?
A Flawed Referral Model
From the accountant’s perspective, they missed a massive opportunity. Instead of Scott sharing the accountant’s story, Scott shared Matt’s story. This is the problem with the outdated referral model—you lose control of the narrative and miss out on organic growth.
Most accountants have hundreds of clients with different goals and needs. On top of that, they juggle relationships with third-party experts like Matt. The result is a time-consuming, unleveraged model that lacks scalability.
A Better Model: Team-Based Planning
Rather than relying on a third-party referral model, consider a team-based approach. In this model, you’re part of a proactive planning team that handles all aspects of the client’s needs. Here’s how it works:
- You, the accountant, work alongside a financial advisor and other local professionals, like a business attorney or business broker.
- You also plug into a Virtual Family Office, giving you access to a team of specialists who cover everything from tax planning to business advisory services.
With this model, you’re not waiting for Scott to call you. Instead, you’re meeting with him quarterly to stay ahead of the game. When Scott’s income jumps from $300,000 to $600,000, you’re prepared with a comprehensive plan that includes:
- A buy-sell agreement for him and Sarah
- A mix of qualified and non-qualified plans
- A cost segregation study to fund the buy-sell agreement
- Leadership coaching for the company’s growth
- Review of life insurance policies for Scott and his family
The Result: Organic Growth
Fast forward to that same football game. Now, when Scott tells his story, he’s not just talking about taxes. He’s sharing how his accountant’s proactive team helped save him $50,000 in taxes, defined his retirement plan, set up a buy-sell agreement, and helped grow his business.
Now, Scott’s friends are not just impressed—they’re asking for your contact information, and real organic growth starts to happen.
The Comparison: Referral Model vs. Team-Based Model
- Referral Model: Puts your client in an uncomfortable position of meeting new people and provides mediocre results. You lose control of the relationship and your client tells someone else’s story.
- Team-Based Model: Keeps your client working directly with you while providing world-class results. You retain control, deliver more value, and your client tells your story to others, leading to organic growth.
Conclusion: Elevate Your Practice
By moving to a team-based model, you can gain deeper trust with your clients, provide more value, and increase your financial success—all while enjoying a better quality of life with less time spent in the office.
If you want to know how to shift your practice to this model, schedule a strategy session with us today.
