By John napolitano
Those days seemed to drag on forever. I
did not feel very productive or accomplished,
and generally did not feel good about myself
or my chosen career path.
Then there were days when I’d look at the
clock and be amazed that it was already 6
p.m., and wonder if I could postpone what
was on my desk until tomorrow, or perhaps
take it home to finish up after putting the kids
More often than not, the quality of my day
had to do with the clients I was working with
on those given days. When the clients were
too small or not fun to be with, I hated work.
But when my day was consumed with one or
more of my ideal clients, the day was nirvana.
I am here to tell you that the key to success
is more about working with the right clients,
rather than more hours and more clients.
Discovering whether a prospective client is
right for you is a combination of art and science, or qualitative and quantitative criteria.
And these criteria are right under your nose,
but not fleshed out in enough detail for you
to benefit from that information.
The client audition
When i was in practice as a Cpa, there were days when i left the
office wondering why i would ever want to go back the next day
and do it again.
Choose to work only with those who work best for your firm
We’ll talk more about this later.
For a starting point, consider the top 10 to
20 percent of your clients today as your “A”
clients. The definition of an “A” client needs
to begin with your current reality — not your
vision of your future dream client. The balance of your stratification efforts from B
through D should occupy approximately 25
percent each, unless the detailed analysis
tells a very different story. Every practice will
have natural break points that help define
their current stratification.
Appreciate your work and look to you for
more guidance; and,
Willing to hire you for more than just tell-
ing them what happened last year.
Both the quantitative and qualitative criteria can and should include any niche specialties that your firm has successfully carved
out, such as multi-state issues, international
issues, or industry specializations.
This sounds like a lot of work, and it is. But
this is the baseline that is necessary for you
and whoever else in the firm is responsible
for business development — especially when
it comes to creating a vibrant wealth management practice alongside your CPA practice.
BABY BOOMERS MIXED
ON WEALTH TRANSFER
NEW YORK — Just under half of affluent
parents ( 49 percent) in a nationwide poll
felt it was important to leave a financial inheritance to the next generation,
according to the U.S. Trust Insights on
Wealth and Worth Survey.
Polling 457 high-net-worth and ultra-
high-net-worth individuals with $3 million
or more in investable assets, the survey
found that surprisingly few had well-
developed plans to preserve and pass
on their assets to either their children or
charity. The survey also found:
While 88 percent of the wealthy have
an estate plan in place, nearly four in 10
(or 39 percent) acknowledge that their
estate plans are not comprehensive.
Nearly half ( 48 percent) have not
established a revocable trust, and seven
in 10 (72 percent) have no irrevocable
One in 10 has never discussed tax
planning with their advisor, even though
only one in three people surveyed
strongly agrees that their investment
portfolio is structured to minimize the
impact of taxes.
Only about 34 percent strongly
agree that their children will be able to
handle any inheritance that they plan to
UNDERSTANDING THE CLIENT BASE
To gain a good understanding about whether
a prospect is a good client for your firm, you
must first understand your client base. Most
CPAs know that stratification of the client
base is necessary for any well-run business,
yet very few can show me the stratification of
their client base when I ask to see it.
At the beginning, you should probably
stratify clients in three or four levels. Commonly a “school-like” system using grades
from A through D is adequate. Some practice
management consultants will tell you that
you only need to define your ideal A + clients
and disregard the rest, but that is not reality
for the firm just embarking on this path of
defining and attracting more ideal clients.
John P. Napolitano, CFP, CPA, PFS, is chairman and CEO of U.S. Wealth Management
in Braintree, Mass.
QUANTITATIVE AND QUALITATIVE
This stratification effort should be based on
both the quantitative and qualitative criteria
that are important to you. Some of the more
common quantitative criteria include:
Gross accounting fees paid to the firm;
Realization rate per hours worked;
Years that a client has been in business;
Whether or not the prospect has ever
sued a professional services firm;
Number of employees;
Quality of accounting staff;
Interest and dividend income;
Gross sales of the client company; and,
This list, obviously, can become quite
long. Customize this list to the quantitative
criteria that are significant and important to
your firm, and then rate each client in each of
the important quantitative criteria. Try not to
let subjective criteria enter the picture here.
These matters should be considered on the
facts and circumstances as they currently exist, and not as they may grow to be.
As for qualitative criteria, I believe they are
just as important as the quantitative criteria.
Some of the more important include:
Paying your bill on time and without
complaining or negotiating;
Willing to refer you to other ideal clients;
Fun to spend time with;
ESTABLISH CLIENT ‘SCORES’
Once you have ranked every client, you are in
a position to use this information to benefit
your life and your business.
First, make a decision regarding how high a
new client must score to make it through your
new client acquisition process. If you decide
that the firm will accept all levels of new clients, you may be asking for trouble.
Ask yourself what significant opportunities
are provided by new D clients. If you think
that you have a good answer, ask the question
of your staff. Unfortunately, there is no room
for D clients if the partners and employees
want to enjoy their days and grow their business. In fact, one very liberating way to prove
to your staff that you’ll not be accepting new
D clients is to fire your existing D clients. I am
shocked at just how many firms fight me on
this, thinking that the tiny margins generated
from such clients are worth the aggravation.
At the same time, if we were to poll your A
clients asking if they’d appreciate more time
with you, the answer is typically an overwhelming “Yes.” Don’t waste time here — fire
your Ds and spend more time with your As.
A less painful way than simply firing them
may be to find another practitioner who may
find them to be an A client. I’ve counseled
firms to actually identify the successor firm
in advance and reach an agreement on how
the transition may occur. Then send a very
professional letter to the D clients suggesting
that you have found a more attractive service
alternative for them, and that you’d be happy
See CliENt on
WOMEN MORE CONFIDENT
ABOUT RETIREMENT PLANS
ST. LOUIS — The confidence level of women in their ability to plan for retirement
has reached a three-year high, according
to a new survey, with 69 percent of women rating their confidence level as good
or very good. In addition, for the first
time in three years, women’s confidence
is on par with men’s (71 percent of men
rate their confidence as good or very
good). The survey, commissioned by online investing firm Scottrade, shows that
women’s savings tactics differ from men’s.
Forty percent of women have structured
their portfolios to include investments
that will generate income during retirement, compared to 30 percent of men.
In addition, more women have started to
save for retirement than men (79 percent
versus 74 percent).