Searching for CPA: Initial Fee?

Question

I’m doing research online, through BP, and within my network to find elite CPAs/EAs/etc. that a majority of their client base are Real Estate investors.

In my search to find and schedule initial consultations/interviews to ensure it is a right fit for both parties, I’ve noticed an intriguing difference. Some have a fee and some do not.

There is no trend or pattern I’ve noticed as to why or how much.

Without asking in any means to be negative, cheap, frugal, (insert any emotion), etc., and out of pure curiosity, what makes some charge for an initial consultation vs others?

Michael Plaks · Answer

@Nat Rojas

Good question. There's no trend because tax businesses are not similar to each other. We have 20+ accountants on this board who specialize in REI and qualify as what you called "elite CPAs/EAs."  I know some of my colleagues better than others, and I know for sure that we do NOT run the same operation.

Some CPAs/EAs are one-person home offices, and some are multiple-office firms with several accountants and supporting staff. Some work with beginner investors, and some work only with seasoned investors. Some focus on tax preparation, and some provide a wide range of services. Some charge per project, some charge hourly, and some offer all-inclusive advisory programs. It's really all over the board. So you can't compare apples to apples here.

Besides the major differences in our operations, there're differences in those initial contacts that you vaguely labeled "consultations/interviews."  See - this is a problem right here. Consultations and interviews are two very different things. Consultations are when you ask us for advice on your business. And this is exactly what we sell: our time and our knowledge. So you're asking for something that we normally charge for and make our living from. Some of us allow you a "free sample" and some don't. It should make sense. In my firm, consultations are not even available, free or paid, until after you sign up with us as a client.

Interviews are an entirely different arrangement. This is to determine whether we are a fit to work together, not to get tax or business advice. Interviews are free by definition. Problems arise when investors try to obtain a free consultation under a disguise of an interview. Some investors and gurus believe this is a legitimate strategy: call 10 accountants for a free consultation and pick their brains. Many of us refuse to play this game.

Here's a way to think about it. Imagine you pay me several thousand dollars for access to my expertise and my time, as a client. Then you see me giving this same time and expertise to others for free. Wouldn't it bother you?

So my (free) advice is to start by deciding what is it that you are looking for: a one-time consultation on some specific current issue, preparing your tax return or an ongoing relationship with tax planning and various other services. Then, browse this forum and see what we post and how we answer questions. This will give you a clear picture of our expertise and personality. Then contact those experts that you like and compare their services.

Linda Weygant · Answer

I'm one of those that doesn't charge for the initial meeting but, as Steven and Michael both mentioned, the initial meeting is just to see if we're a good fit.

The first thing I ask is "tell me what you've got going on" and then I let them free form for a while.

This tells me how organized they are, how sophisticated they are, etc.  None of that is disqualifying, but it does give me an idea of how much work the client will be.

I will then ask some clarifying questions and then give them one or two nuggets that might include ways to maximize a deduction or consider a strategy that might apply to them.

This does a few things...

1. Let's them know that I'm knowledgeable in the areas that matter to them.

2.  I can bring value to their scenario.

3. Gives them some Google-able terms to do further reading on, if they want.

I don't look at any of their documents before the call.  I won't give advice and I won't commit to a specific strategy.  I will discuss options, if they exist, but that's about it.

The specific  review and advice come after we've decided to work together.

i have a fairly high conversion rate, but there are also people I decline to work with pretty quickly, based on that interview.

I also outright decline many inquiries outright depending on how full my task list is, just because I don't want to start a new relationship off being too distracted with other stuff.

Nicholas Aiola · Answer

I agree with the general sentiment of my colleagues above. Our initial meeting is free but I am not the one conducting it and it is made clear that the intro meeting is informational on both sides of the coin - we learn about you, you learn about us.

Anyone can book a paid consultation directly with me for tax advice should they want to skip the intro and get right to brass tacks (pun intended).

I don't believe anyone should pay for an interview but, as Steven said, us professionals should not give away free advice either, especially when we have clients paying for our expertise. As Linda mentioned, high-level nuggets are a good way to demonstrate an understanding of an investor's tax situation and possible solutions but granular tax advice should not be given in an intro meeting - not only because it's a paid-for service but also because tax advice is extremely individualized; we need to know the investor's unique situation before we can accurately and confidently advise, so a review of documentation would be a prerequisite (in most cases).

Lastly, as some have said above, we also turn away clients - whether it be for capacity reasons or because it isn't a good fit. An intro meeting is a good way to align interests and expectations.

There's no right or wrong answer and, as Michael mentioned, everyone does it differently. That's why it's important to shop around and go with who you feel is the best fit for you and your business. You couldn't go wrong with anyone on this thread, or some others that you'll find here on BP.

Eamonn McElroy · Answer

Every business is ultimately going to do what works for them based on their prospect demographic and how they source prospects.

My practice does not charge for a 30 minute "get comfortable and ask high-level, general questions" phone call, however we have a pretty high conversion ratio so to speak.  It's done with the understanding that the call is not free consulting, rather more of an interview to determine if my practice and the prospect are a good fit.

If a higher percentage of my calls were those focused solely on fees ("price shoppers"), those fishing for free advice, those with not a lot of complexity that I would have to turn down, etc, I might consider charging a nominal fee to like the previous poster mentioned.

Michael Plaks · Answer

She is biased though :)

Nicholas Aiola · Answer

@Michael Plaks In tax, likely not. Anything else, though..................... ;)

Michael Plaks · Answer

False. One totally could go wrong with me.

Steven Hamilton II · Answer

I agree with MOST of what @Michael Plaks said with the exception of firm size as it should not matter. If someone is under charging you may pay for it on the back end if they are not investing into themselves and a team. What if you need documents or something else while they are away on vacation or a health issue comes up.

One thing to consider is the number of clients we are each willing to take on. I'm taking on a limited number right now while we fine tune some processes and review any potential firm changes.

I know of one person here who received over 70 requests for consultations in January. I knew that feeling. I charge a consultation fee that is applied to the first service and very soon we are not going to be applying it.  For those we take on it becomes  free consultation. That said our time is our commodity. We get a lot of calls of people just asking questions. I haven't spend years and tens of thousands on education to give my knowledge away for free. I've answered a ton of things here while I was building my practice and I still give high level answers. However, that consultation is a barrier to my calendar. If you think my fee is high than you are not going to be a fit for my average costs anyway.

If someone wants to see the depth of my knowledge and an example of how we work and my knowledge they can look like here.

@Natalie Kolodij @Jake Hottenrott @Linda Weygant @Nicholas Aiola may all have some opinions.

Michael Plaks · Answer

That's more than we usually agree on :)

Firm size matters because you may have someone other than the owner to conduct interviews and/or consultations.

Matthew Talmadge · Answer

For us, it's a barrier to entry.  We specialize in Real Estate and we have, typically, limited room for new clients.  It's a way of weeding out those who are serious and those who are not.  It's a way of finding those who understand the value you add.

Searching for CPA: Initial Fee?

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