but financial institutions targeting the cpa market need to tread wisely.
by rick telberg
personal financial planning is clearly a core part of what a cpa does. most in the profession see it emerging as a significant part of the cpa firm service mix.
still, financial institutions seeking allies in the cpa community face some high standards and some old prejudices.
in a study performed in conjunction with the journal of accountancy custom media solutions, 76 percent of accountants and financial managers warned that “financial services representatives” are “too sales-oriented,” and 48 percent said they “aren’t as concerned about what’s best for the client.” some of the results are published in this month’s journal of accountancy.
the doubters and critics may not be representative of the profession. in fact, though not necessarily selling products, many cpas report selling services outside of auditing.
tax planning was available at 74 percent of respondents’ firms. fifty-eight percent did retirement planning, and 51 percent offered estate planning. about 20 percent handle college savings accounts. almost a third were into 1031 exchanges or other real estate strategies. thirty-six percent helped clients manage wealth. eleven percent were into insurance; seven percent worked with mortgages and home equity loans.
many cpas saw these services as opportunities, in some cases obligatory.
joe beck, a cpa in new york, said that non-audit services were “becoming a necessity from the client’s point of view.”
a cpa firm partner agreed, saying, “clients, in many cases, prefer one-stop shopping, so they look to cpas for tax and pfp.”
jeff d. horsley, a cpa in atlanta, acknowledged the opportunity but had serious advice for those who grabbed it.
“i see it as a potentially lucrative and growing revenue base for many firms that approach it cautiously, exercising the same level of care as with traditional audit and tax services,” horsley wrote. “cpas will need to properly insulate and perhaps segregate their accounting firms for legal liability purposes.”
fifty-eight percent see medium-sized firms deriving a significant portion of their revenues from pfp, 50 percent see large local firms doing so, 43 percent see small local firms doing so, and 33 percent see regional firms following suit. twenty-six percent saw sole-owner firms and 16 percent of national firms also raking in revenue from pfp.
since individual tax services make up a significant portion of revenue, diversifying into other areas beyond traditional tax and accounting services such as pfs has become more of a consideration as momentum grows for some sort of significant federal tax reform,” according to one practitioner in a small local firm. “i’d include prime plus/elder care services within pfs. due to the aging population, this will become a significant area of opportunity for small firms particularly, i think.”