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Growing Your Firm

Cross selling your services between entities

Creative Planning’s recent acquisition of Bergen KDV ushered in a brave new world of integrated tax, accounting, wealth management, estate planning, and other professional services that were provided by the same firm.

That’s right. A billion-dollar registered investment advisor (RIA) acquired a $100 million accounting firm—not the other way around. The deal highlighted a new business model that allows for cross-selling of services between entities working collaboratively to deliver a better client experience. Ultimately, this approach has the potential to raise profit margins and firm value.

This collaborative model isn’t only for behemoth firms; smaller firms and even sole practitioners can integrate tax, accounting, financial planning, wealth management, and estate planning services into their capabilities by partnering with a virtual family office and leveraging a concept I call “The Financial Flywheel.” This approach gives clients a more complete, one-stop source of holistic advice and a better client experience. My forthcoming book "Holistic Guide to Wealth Management” talks more about integrating services with the human side of behavioral financial advice.

As Visionary Group’s Bob Lewis told me recently, accounting firms have large numbers of clients who can be converted to the RIA’s services, particularly business owners on the cusp of exiting.

“When those companies are sold, it creates a large liquidity event,” said Lewis. “Those newly created funds can be invested into the RIA and materially increase the firm’s income.”

But the accounting firm also benefits by gaining access to the RIA’s large base of affluent individuals, families, business owners, and executives who have many needs beyond taxes.

“The clients of the RIA can materially elevate the income stream of the accounting firm—not just with the other services they need for themselves, but for everyone in their circle of influence, such as peers, business partners, and other family members,” said Lewis.

Why cross sell?

Maybe you already have more than one entity that offers wealth management services, or are considering partnering with a virtual family office in the future. Either way, it’s always good to know the “why” behind your efforts. Here are six reasons to cross sell your services: 

  1. Create efficiency. You no longer have to chase down a client or another advisor for documentation. An integrated model ensures real-time sharing of information and data.
  2. Get higher revenue clients. By integrating a tax and accounting practice with a wealth management practice, you can create a force multiplier that allows you to cross sell services and attract higher-value clients.
  3. Maintain a holistic client relationship. When an accountant and wealth advisor work collaboratively, they gain a 360-degree perspective on a client’s business and personal finances that allows them to take the level of advice provided for business strategy and personal investments to the next level.
  4. Do it for client retention and organic growth. Research from Cerulli Associates finds that 70% to 80% of heirs choose not to work with their parents’ financial advisors when mom and dad pass. Offering business advisory services to next-generation clients before they receive their inheritance is a valuable retention strategy.
  5. Create capacity. Firms are struggling for talent and stretched thin. Simply adding more low-margin tax, compliance, and accounting work burns out staff without improving the bottom line. Instead, by cross selling clients into higher-margin services, you can reduce the need for more staff, while forming deeper, more meaningful, and more profitable relationships with existing clients.
  6. Boost your firm’s value. If a tax and accounting practice generated $2 million in revenue, it might be valued between $1.6 million and $2 million (0.8x to 1x revenue). However, a wealth management firm generating the same $2 million in revenue would fetch between $4 million and $6 million—two to three times as much. Think about how much higher your enterprise value would be with a wealth management component within your practice.

AI plays a role

There’s no replacement for candid, in-depth conversations with clients to identify issues and changes in life circumstances. But there are also many new tools on the market, including artificial intelligence (AI), that can mine your client data year round. My friend Day Wachell, co-founder of Responsive AI, calls these “moments that matter.”

Let’s say your client, single mom “Esther,” recently stopped paying tuition for a dependent. AI would notify you automatically that Esther is no longer filing Form 8917, Tuition and Fees Deduction. With an adult child no longer dependent, she will likely be taking stock of the next phase of her life. There are many conversations we can have with her that could lead to new service opportunities and guidance.

Here are some other filters that your human or AI team can identify for your cross-selling potential:

Liquidity event. Pay attention to clients who are expected to experience a liquidity event, such as selling a business or receiving a large inheritance. These clients can benefit from holistic wealth management services.

Tax planning within a financial plan. By offering tax planning services, you can help clients optimize their tax strategies and minimize their tax liabilities in the short term. In addition, you can incorporate these strategies into a financial plan that considers a long-time horizon.

Estate planning. The majority of Americans, including the affluent, do not have current estate plans, if at all. Danny Lohrfink, co-founder and chief product officer of, told me he uses machine learning and AI to review existing estate plans, help clients transfer assets through revocable trusts, and ensure their estate plans are up to date. His firm even has integrations with Zillow that identify opportunities to update client estate plans when they sell a property and advise the heirs who will inherit their wealth.

Life events. Keep track of important life events that may impact your clients' financial situations, such as getting married, having children, or buying a home. And don’t forget about retirement planning and reaching age 50 when they can start making catch-up contributions to their retirement accounts.

Clients with working teenage children. Bento Engine CEO Phillipp Hecker told me he’s a big proponent of educating teens and their parents about saving and investing the income from a summer job for retirement. For example, if a teen places just $1,000 of summer earnings into a custodial IRA for five years with a 6% annual return, they’ll have more than $87,000 in tax-deferred growth by age 65. According to Hecker, this approach enables advisors to establish generational relationships with families by imparting valuable financial advice for all household members.

Your role as a trusted advisor

As technological advances continue to increase AI opportunities and collaboration between professionals, the financial flywheel is one of the most powerful ways I know to keep building momentum for your practice and client service capabilities. Remember your role as your client’s trusted advisor, while also finding ways to grow your firm.

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