EXECUTIVE SUMMARY

CONSULTATIVE SELLING IS A NONMANIPULATIVE process that focuses on clearly defining a client’s needs and objectives and securing agreement that they should be addressed. In traditional selling, on the other hand, the emphasis is on the product. USING OPEN-ENDED QUESTIONS THAT CAN’T BE answered “yes” or “no,” the CPA should solicit the client’s feelings and attitudes about his or her financial needs or problems. CHECKING QUESTIONS ARE A DEVICE that can be used to gain interim agreement from clients that a proposed financial plan addresses the goals and objectives they have set for themselves. IN ORDER TO MORE EFFECTIVELY ADDRESS A CLIENT’S objections to a financial plan, the CPA should restate them until the client can be more specific and clear about the reasons for them. AFTER THE FINANCIAL PLAN IS AGREED TO AND implemented, the CPA should review it periodically with the client to reinforce how his or her goals and objectives have been addressed.

JOHN E. GRAZIANO, CPA, is president and founder of Future Financial Planners Inc. and FFP Insurance Services Inc., in addition to heading his own CPA firm. His e-mail address is johngraziano@ffpinc.com. PATRICK J. FLANAGAN, CFP, is a senior division manager with Future Financial Planners. His e-mail address is patflanagan@ffpinc.com.

ntegrating financial planning into an accounting practice is a natural extension of the work CPAs perform for their business and individual clients. Unfortunately many practitioners are concerned that providing financial products and services will make them “salespeople”—an unwelcome departure from the CPA’s traditional role of consultant. This article explains the process of consultative selling so practitioners will be able to enhance their value to the client without interjecting traditional sales situations into the relationship.

TRADITIONAL VS. CONSULTATIVE SELLING
Traditional selling is, by design, a manipulative process. Salespeople have a product with specific features for which they need to find a buyer. Customers have to be convinced of the reasons they need that product. It’s the product that’s the focus of the sale, not the customers’ needs, objectives, desires and hopes. If a car on a dealer’s lot has specific optional features, customers must be convinced they want those options, even if they had no desire for them when they walked in the door.

Salespeople are taught to maintain control of the sales process in order to make the sale. They direct the conversation and tell customers what they need and don’t need. They must convince the customer that other people have found the product useful. Salespeople typically wait until the end of their presentation to determine whether the customer agrees with the need for the product.

The consultative selling process is, by contrast, nonmanipulative. It doesn’t focus on the product. Instead, its goal is to clearly define a client’s needs and objectives and secure that client’s agreement that these needs should be addressed. Techniques that keep clients involved in the process, actively translate their feelings into actions and maintain their ongoing interest in continuing to work toward their goals are all critical to consultative selling.

KNOW THE CLIENT
CPAs deal with a variety of clients, both individuals and businesses, each with their own degree of sophistication and involvement in the accounting and tax-preparation process. Part of the role of the CPA is to assist the business client in effectively managing the financial side of the business to increase its overall value. Other advisers who set up pension plans, employee insurance and benefit programs and other such programs usually are not as aware of a business client’s tax and financial situation as the CPA. Becoming versed in these programs and how they can most effectively be used is a natural extension of the CPA’s role in protecting the business and increasing its overall value. It isn’t out of line for CPAs to tell the clients how important it is to collaborate with these other advisers; the more information available to the CPA, the better advice he or she can provide.

Assessing new clients is also critical, since financial planning involves them as active participants in the completion of a financial plan. Clients who are actively involved in the process are easier to work with. Consultative selling helps CPAs bring new clients into the financial planning process through effective questioning techniques that help them communicate their goals.

Key questions to ask new clients are

How many years have you been investing?

What types of investments have you purchased before (for example, stocks, bonds, mutual funds, and variable or fixed annuities)?

Have you worked with a planner in the past?

It’s also very important to ask clients how they feel about the performance of their various investments and the quality of the advice they’ve received in the past. Negative experiences will show the planner the areas on which to focus and types of recommendations the client is likely to resist. Some planners ask how often the client listens to financial news and what magazines or other publications they regularly read. All of these things point to the client’s attitude and mind-set.

CPA IS A NATURAL CHOICE AS ADVISER
Since CPAs deal primarily with tax issues, they already have intimate knowledge of how the client’s decisions have affected their overall financial picture. Still, the client’s objectives and the nature of the advice that resulted in these decisions may not always be clear to the CPA.

The client’s broker, insurance agent or other financial advisers often are familiar with only the part of the client’s financial picture that they are handling. They can unwittingly give advice that negatively affects the client because of their limited knowledge of other factors relating to his or her circumstances, including the tax situation, despite having good intentions about helping him or her increase wealth.

By actively involving the client in the planning stage, the practitioner is better able to help avoid problems before they happen. Due to the degree of trust that has been developed over time, the CPA can engage clients in detailed discussions about their feelings and objectives and thereby gain more insight than is the case with most other financial advisers.

BE AN EFFECTIVE LISTENER
A big part of the CPA’s role is gathering facts and figures from clients to ensure they’re maintaining records and paying taxes in the manner prescribed by law. CPAs normally ask information-gathering questions such as “What were your charitable contributions last year?” or “Did you pay anything for child care?” These are close-ended questions that can be answered in just one or two words; they are meant to gather facts, not find out how the client feels.

Open-ended questions, on the other hand, such as “For what purpose?” or “How did you feel about that?” relate to what the client was thinking when he or she made a decision. They will elicit information that the CPA may not be accustomed to getting. Asking “How will you provide for your family in the event of your premature death?” is very different from “Do you have any life insurance?” Similarly, asking “What decision did you make?” will not provide the same insight as the question “Why did you make that decision?” The CPA is not “selling” clients anything, but asking questions that will allow them to draw their own conclusions about needs to be filled or problems to be solved. In a very positive way, this questioning technique will create ideas in a client’s mind about the proper course of action to achieve his or her objectives.

Open-ended questions allow a smooth transition into the financial planning process that actively involves clients in planning their own future and gives them an additional degree of insight into their own situations.

The process of listening effectively requires the adviser to avoid offering opinions or correcting what a client is saying and to gather clarifications of those comments and ideas through additional questions. CPAs should avoid offering an opinion before all the questions are answered and be certain the client has expressed all his or her thoughts and feelings.

THE “BUY-IN” PRESENTATION
Using what are referred to as “checking questions” during the presentation of a plan, CPAs can guide clients in a nonthreatening and nonmanipulative manner. For example, a CPA who has prepared a plan that calls for life insurance can ask for interim agreement at certain points in the conversation to be sure the client understands how the plan relates to the needs he or she identified. That way the CPA can avoid having to revisit every element of the plan after the presentation. Ask checking questions such as “Is it clear how the insurance I am recommending meets your goal of satisfying debt and providing ongoing income for your family in the event of your death?” or “Are there any ideas or recommendations I’ve presented to this point that you feel need to be clarified or revisited?” or “Do you agree that balancing your portfolio in the various investments will better fit with the risk tolerance you described rather than concentrating your holdings in one type of investment?” Consistently referring to the original objectives and soliciting agreement from the client during the presentation that the plan is addressing those objectives keeps the client involved and allows the planner to address several small objections as they arise rather than large ones at the end.

RESOURCES

AICPA Resources Publications Mastering the Art of Marketing Professional Services: A Step-by-Step Best Practices Guide (# 090474JA). Statements on Responsibilities in Personal Financial Planning Practice, electronic PDF file (# 017216PDF1). CPE Successful Selling Strategies for CPA Firms, a self-study course (# 181191JA). Other Resources Consultative Selling: The Hanan Formula for High Margin Sales at High Levels by Mack Hanan (AMACOM, November 2003). CustomerCentric Selling by Michael Bosworth (McGraw Hill, November 2003). The 5 Paths to Persuasion: The Art of Selling Your Message by Robert B. Miller, Gary Williams and Alden M. Hayashi (Warner Business Books, April 2004). The New Conceptual Selling: The Most Effective and Proven Method for Face to Face Sales Planning by Stephen Heiman and Diane Sanchez (Warner Books, October 1999). Non-Manipulative Selling by Phillip Wexler (Simon & Schuster, 1992).

OVERCOMING OBJECTIONS
Regardless of how effectively the CPA has prepared the plan, the client will have some objections. Clients may feel their goals are unattainable when they see the commitment they need to make; they may have preconceived notions about certain types of products or concerns about committing to a program. The most effective way to deal with these is to restate them. This causes clients to further explain how and why they feel the way they do. Hearing the CPA repeat what they said allows clients to really focus on and address their objections.

If you present a client with a planning analysis that recommends an additional $2,000 a month be contributed to a retirement program and the client objects, you might say, “So if I understand you correctly, you feel you don’t have the funds available to address this goal.” If the answer is “yes,” you can review the budget and show the client how it can be accomplished. If the answer is “no,” encourage the client to elaborate on the reasons why.

When the client’s objection isn’t clear, the CPA can again probe for the reasons behind it: “I’m sure you have a good reason for feeling that way. Can I ask you more specifically what it is?”

As the client elaborates, the CPA can continue to restate the objections until they are clear and can be addressed. During this process, the client often will realize an objection is not founded, and agree that the CPA’s recommendation is the best path to follow.

Once the client’s objections have been overcome—but only after he or she has agreed the plan addresses the objectives identified—the CPA can suggest vehicles appropriate to address the needs and goals. In this manner the products are merely tools to be used to achieve the goal rather than the focus of the discussion.

PRACTICAL TIPS TO REMEMBER

Involve the client in the process to make the planning easier and ensure that it’s geared to his or her objectives. Clarify client goals and expectations by using open-ended questions that can’t be answered “yes” or “no.” In presenting a comprehensive financial plan to a client, stop periodically to ask “checking questions” that reassure the client his or her objectives are being addressed by the recommendations. If the client raises objections to any part of the plan, restate those objections until they are clear to both you and the client and can be addressed.

AFTER YOU IMPLEMENT THE PLAN
The most important part of the planning process actually comes after the plan has been implemented. Clients often feel overwhelmed, and the decisions they made with the assistance of the CPA often must be reinforced. A plan that includes reallocating investments, setting up education plans and evaluating and changing insurance coverages likely will take some time to digest, and can be overwhelming for a client.

At first clients will be proud they’ve taken steps to organize their financial lives. They’ll tell others what they’ve done and how they feel about it. But then they’ll often receive unwanted advice from the “Monday morning quarterbacks”—family and friends who weren’t there with such advice before the process began. Or they may just have doubts about whether they’ve done the right thing. “Buyers’ remorse” sets in, and the client may back away from the plan that’s been implemented, ceasing monthly contributions to retirement plans and letting insurance policies lapse.

To avoid this it’s critical to meet with the client a month or two after completion of the plan to review the goals and objectives and underscore how the implementation phase addressed them. This also gives the CPA the opportunity to determine whether any new concerns have cropped up and to address and clarify any after-the-fact objections. At this point, the CPA should set up a schedule for periodic meetings with the client to review the ongoing progress and to make needed adjustments as his or her situation changes.