LETTERS

Nobody understands CPAs

I have read with great interest your articles regarding attempts by wirehouses to cultivate relationships with certified public accountants (InvestmentNews, March 2; April 20).

CPAs have two principal ingredients in a successful investment client relationship: They have an intimate knowledge into all aspects of a client’s financial circumstances and they have perhaps the highest level of client confidence of any adviser.

There’s also an eroding profit margin in the traditional services provided by CPAs, so they have a serious business need.

Meantime, the investment houses have excellent investment vehicles with a profit margin that is attractive.

This is a marriage made in heaven. But in the real world, these two are not getting together.

I realize the wirehouses all are making an effort. Yet they don’t seem to understand how local CPAs think and function.

CPAs are increasingly aware of their own needs as audits become loss leaders and accounting work more cutthroat, with technology-based firms making inroads. That notwithstanding, they are often too busy to make the effort needed to establish an investment-based niche.

Interestingly, as we organized the exhibitors for a recent Missouri conference for managing partners of local CPA firms, our ability to even establish a dialogue with wirehouses was modest at best — and unsuccessful by most reasonable criteria.

The wirehouses don’t have a clue about how to make meaningful contact with the leading local CPA firms. They simply don’t know the network or culture.

CPAs typically have a limited knowledge of investment houses, based for the most part on often-social acquaintances. In addition, they often don’t know the key factors in establishing a successful financial adviser niche. They want and need help, but don’t have the time or background knowledge to seek it. Yet they do have the ability and the client base to make it work.

The wirehouses don’t seem to understand the local CPA community and have not found road maps to make effective connections. When the bridge is identified, the payoff will be tremendous.

Somewhere out there, there is an insurance company, a large broker or perhaps a financial-services conglomerate (or someone who wants to be) with the capital that will find the key. When they do, the results will be awesome.

CHARLES B. LARSON

President

Larson Consulting

St. Joseph, Mo.

Jets, si; jests, no

In your Week in Review column in the May 11 InvestmentNews, you made a passing reference to the “the New York Jests (sorry, that’s Jets).” My suggestion to writer Sam Graff: Sir, stick to financial reporting and avoid any attempts at sportswriting. Your career may benefit from this.

Erik K. Olstein

(N.Y. Jets Fan)

Wilton, Conn.