Case Study – Building Referral Partnerships: The Ownership Model


This practice management case study looks at one practice’s approach to developing successful accountant-adviser referral relationships, the ‘Ownership’ model. This approach involves buying an accounting practice and merging the two businesses.


At a Glance

Submitted by: Steve Salvia
Business: Managing Director of Southern Financial Strategies (SFS)
Referral approach: Ownership model


In detail

Steve Salvia, Managing Director of Southern Financial Strategies (SFS) and 2010 AFA Adviser of the Year, likes to joke that he got so tired of trying to build relationships with accounting firms he decided to buy one.

“My experience with accountants prior to taking on the business was probably very similar to other financial planners,” says Salvia. “I had a very ad-hoc relationship with around five or six accountants. I spent a lot of time trying to nurture those relationships, but it’s not in an accountant’s psyche to ask those probing questions that are needed to give holistic financial advice. Generally, accountants are about numbers and data – there really isn’t a lot of proactive advice.

“It was very, very frustrating. In the end I gave up and started looking for another model.”

In a case of almost perfect timing, one of the accountants with whom Steve held a relationship was looking to sell his business, and in 2008 Steve purchased AccountingFocus, which now forms one of the three pillars of his SFS group, which also includes a financial planning business and business coaching enterprise.

“It wasn’t without pain and suffering; it wasn’t an easy process,” says Salvia of the merger. “I inherited fourteen staff, and unfortunately none of them are still with us. That was the difficult part; I could not get them to align with our service model.

“I worked very hard over a six month period to get them aligned, but after about five months I could see that it just wasn’t going to work. At the end of the day, my experience with accountants has been that they are reactive history takers, rather than proactive history makers. And that was the problem I’d had with accountants in the first place. So now, even though I’d bought the business, I still couldn’t get them to change their thought pattern.”

Salvia elected to hand-pick his own accounting team – one that had the same understanding, ethos and approach to proactive advice. By doing so, he says he now owns the entire client process.

“What I’ve done is turn my accounting firm into a mini-financial planning business that does accounting. I believe that financial planners’ businesses are generally better. Their systems and processes are better.

Salvia believes one of the reasons for this is the questioning techniques used by advisers:

“I get the clients to take a few steps back, and talk about themselves, their business, their families, their hopes and dreams. We then get the clients to work through what I call a Business Health Diagnostic. Unfortunately with a lot of accountants, when a client walks in they say: ‘Give me your payslips, give me your tax returns and your receipts etc’, whereas we actually work through a process and get the client to identify some areas to be addressed. Then we take them through the Magic Wand List – that is, if you had a magic wand what would you like to achieve?

“Clients say: ‘Wow, do you do all this? My old accountant has never spoken to me about this before.’ And they thank us for talking to them about it.”

Another interesting by-product of the acquisition is the fact that Steve now receives more leads from his existing accounting referral partners than ever before.

“I kept my relationships with those individuals, and now that I’ve bought the accounting firm, I’m getting more referrals from those other accountants, even though I’m now a competitor. They now understand the financial planning process more and they see the value in our business and what we do.

“I’ve also made it very clear that their clients aren’t at risk. When I talk to my clients I look for and identify opportunities for increased tax and accounting work. So there’s no threat to them to send a client to us. In fact it’s a benefit because I find more work for them.”

Whether the accounting relationship is external or in-house, Steve believes it takes three things for it to be successful: “They need to know me, they need to like me and they need to trust me. A strategic alliance partner will not do business with you unless all those three things are there.”