Why Agents and CPAs Must Collaborate

Insurers and accountants have similar concerns on behalf of clients, so the more agents and CPAs collaborate, the better. 

person at a desk working with a calculator and a laptop

As an accountant looking at the uncertain economy, I can’t help but say, “It’s an accrual world.” Joking aside, certified public accountants (CPAs) and insurers should do more to help clients in this economy, and, as a CPA, I know how insurance can help individuals and families. 

Whether following the loss of a loved one or a financial loss, life insurance is a lifesaver—truly. But if an insurance agent doesn’t have a chance to make this point, if he doesn’t know who needs help, a CPA can fill the gap. 

For example, if I tell a client he should buy life insurance to protect his family or lower his tax burden, I am not selling him anything. I am telling him what he should do, because it is right and because I don’t have a conflict of interest. CPAs who take a similar approach are why 86% of small business owners say their most trusted adviser is their accountant.

If I refer a client to an agent, it’s because of a specific policy an agent offers.

If I don’t know how a policy works, or don’t understand what an agent says about the workings of a policy, I will recommend a different policy or agent. The point is, I want to help my clients, and I know insurance can be a valuable form of help. But I must first communicate with my clients, which is why I read news and books to expand my knowledge.

In turn, insurance agents must communicate with CPAs, too.

Collaboration is everything. That is, if an agent emphasizes the tax benefits of a policy, he should encourage clients to consult with a CPA. If the benefits are clear, let a CPA say the same; if the terms are reasonable, let a CPA come to the same conclusion.

The more agents and CPAs collaborate, the better. 

See also: Ready for New Accounting Standard?

If collaboration improves communication, making it easier for everyone to explain or understand the importance of insurance, society will be better off.

Insurers must take the initiative, however.

As a whole, the insurance industry needs to contact and build relationships with CPAs.

The relationship is mutually beneficial, because it increases a CPA’s network of potential referrals. This network also allows CPAs to call on insurance agents. The result is a network of trust, for the good of clients and agents and CPAs alike.

Creating this network is not expensive, thanks to industry directories, social media, existing contacts and the internet in general.

The only thing necessary to create this network is action.

CPAs and insurers need to act, even if the act is nothing more than a phone call or letter (via email) of introduction. This act alone may be enough to establish a  conversation; and something—something positive—is better than nothing.

This network can help clients prepare for or protect themselves from the uncertainties of the economy.

Whether the economy worsens or inflation rises, no matter how bad things get, CPAs and insurers can plan for—and avoid—the worst.

Working together, both industries can be models of collaboration and communication.

The two can inspire more industries to follow their example, putting CPAs and insurers at the forefront of innovation.

Romeo Razi

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Romeo Razi

Romeo Razi, CPA, is the founder of TaxedRight.com.

With degrees in computer science and accounting, he is a former IRS revenue agent. Due to his background in computer science, Razi is well-versed in insurance, startups, funding and the changing landscape of tech.

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