Top Things CPAs Should Know Before Partnering with Advisors
Understanding the CPA Industry’s Evolution
Recently, I had an interesting conversation with a CPA who had been following the AICPA and other thought leadership material. He understood that the CPA industry needs to evolve, but his main question was:
“What should I look for in a potential advisor partner?”
This is an important question as many CPAs seek to form deeper partnerships with advisors. It’s no longer about just receiving referrals; CPAs want to grow together with advisors through a collaborative partnership. In this article, I’ll share some key insights to help CPAs identify ideal advisor partners.
Key Traits to Look for in an Advisor
1. Past Success
While past success might seem like a good indicator, it's a double-edged sword. Some advisors may have thriving practices, but that doesn’t always mean they’ll be the right partner for a CPA. Here's why:
- A very successful advisor may only seek small tweaks to their business without changing much.
- If you're looking to co-create a new chapter, an overly established advisor might not be ideal. Look for someone competent but open to evolving together.
Importance Rating: 5/10
2. Licenses
Licenses can be misleading. Having specific designations doesn’t guarantee honesty, work ethic, or communication skills. It’s more important to find an advisor who excels in one area rather than someone who is a "jack of all trades."
Importance Rating: 5/10
3. Company Affiliation
The company an advisor works with is not highly relevant. Good advisors can be found at both large firms and independent companies. What matters is the advisor's approach and alignment with your goals.
Importance Rating: 1/10
4. Location
In today’s virtual world, location is less of a factor. Most meetings are done online, and even for large clients who prefer face-to-face meetings, travel is no longer a major barrier.
Importance Rating: 2/10
Must-Haves in an Advisor Partnership
Now that we’ve discussed general traits, let's dive into what makes or breaks an advisor partnership.
1. Understanding of the CPA Industry
A potential advisor should demonstrate a solid understanding of your industry. Do they know tax deadlines? Can they differentiate between value-based billing and hourly rates? It’s essential for an advisor to grasp the challenges you face as a CPA.
Importance Rating: 9/10
2. Team vs. Solo Mindset
A true team-based mentality is crucial. Many advisors are trained as solo players, focused solely on gaining more clients. However, the best advisors are those who prioritize raising the perceived and actual value of the CPA in the client’s eyes. This mentality benefits everyone involved—CPA, client, and advisor.
Importance Rating: 10/10
3. Niche Expertise
In some cases, having an advisor with niche expertise can be valuable, while in other situations, it may not matter as much. The importance of niche specialization will depend on your specific needs and the type of clients you serve.
Importance Rating: 5/10
