How partnering with a CPA firm boosted my life insurance practice

After 22 successful years as an agent with Northwestern Mutual, I left for the independent market. When I joined Kolb & Company (now Sikich), they were the largest independently owned accounting firm in southeastern Wisconsin. I’d like to share some thoughts on what made this partnership work so well.

Why is it that there are very few CPA firms in the United States that have an in-house, dedicated life insurance specialist? It seems to me that this would be a huge advantage for the firm because it could provide a valuable service to their clients. The problem is that it can be difficult to match the right agent with the right accounting firm.

I was fortunate to have had more than 10,000 clients when I joined Kolb. I brought a successful practice to their firm, and they recognized that. Kolb also had a substantial clientele that they could bring to the table. A newer agent who does not have a strong base clientele does not bring as much value and will not be a good fit.

The life insurance agent who wants to have a successful partnership with a CPA firm must have a solid sales record over a number of years. Accounting firms are not structured to train agents. They look for excellent partnerships and for results. Initially, there must be a discussion as to whether the accounting firm has the volume of clients to be able to refer to you. The agent must develop an extremely strong bond with the CPAs, as they will be the referral source going forward. Spending a lot of time together will enhance your relationships, as you will each learn how the other works.

The CPAs were fantastic. They introduced me to their referral sources without hesitation. These referrals included attorneys, bankers, business owners and consultants. A CPA is a client’s trusted advisor, so when they introduced me to their clients, these referrals trusted me as well. 

The insurance specialist must be completely independent and unbiased in their product recommendations to clients. Showing any favoritism to carriers is not a good idea. 

The CPAs also must be unanimous in agreeing to bring the insurance specialist on board. This buy-in starts with the partners and flows down to the senior managers and other managers. When I was set to join Kolb, the partners and I held a meeting where we laid out the game plan for our new alliance. I told them that if they did not believe we could take our insurance services division to a national level, I was not going to join them. All the partners agreed that we could, and I believed them. I was made a partner in our financial services area shortly after joining the firm.

One of the most important things I did upon arriving at Kolb & Co. was to begin to educate the CPAs on how life insurance works and how I presented to clients. Educating the CPAs about insurance concepts  was important and helped establish my competence in their eyes. 

We always suggested performing independent, unbiased reviews of clients’ insurance programs. Why was this so important? First, it set us apart from other agents who were not as thorough or were not actively preparing these reviews. We explained to clients that my role was not to destroy the existing relationships they had with their agents, but to enhance their relationship with the firm. Most of the time, clients told me they had not had much contact with their current agent and that we should proceed. What the insurance reviews did was educate the client about what they owned. We discussed issues with ownership, beneficiary designations, danger of policy lapse or term expiration. We also discussed whether their current coverage effectively met their current goals and objectives for protection. This service was free.

When Kolb & Co. merged with Sikich in 2013, our footprint expanded unbelievably. We now had accounting offices throughout the Midwest, along with other advisory service offices throughout the country. I needed to travel to these offices to get to know these people and develop our professional as well as personal relationships. I was the only insurance specialist in this very large accounting firm. Being present worked!

Because our CPAs were happy with having a life insurance specialist in-house, referrals began to flow in faster than ever. This did not happen overnight, but we developed incredible relationships over a short period of time.

It takes the right combination of the agent and the accounting firm to make this arrangement successful. It is not easy, but it’s rewarding for all parties involved: most of all for our clients.

What are three reasons why an agent would not want to align with a CPA firm?

1. If the agent leaves their current agency and the new alliance does not work out, they will then have a new issue to deal with (i.e., finding new employment).

2. The agent will have to give up some percentage of their compensation.

3. A great deal of time must be spent working in the business, and it may require more travel than they are accustomed to. This is why a new, younger agent with a young family might not be a suitable fit.

What are three reasons why an agent would want to align with a CPA firm?

1. The alliance will differentiate the agent from the stand-alone agents.

2. The agent will be viewed differently by referral sources, CPAs, and clients. The agent will be seen as more of a specialist than as an agent.

3. The insurance specialist will be able to strengthen their clientele by acquiring new referrals from the CPAs and clients met through the firm.

My idea of becoming the in-house insurance specialist with an accounting firm was the bright light that shone in my mind. I was able to continue to use my skills as an agent and continue to work with existing clients, while being able to expand my reach globally through the alliance with a national CPA firm. This was a true win-win situation!

Steve Spector is a recently retired partner-in-charge of insurance services for Sikich. He has written $3 billion in death benefits on more than 15,000 lives in his 43-year career. Contact him at [email protected].