{"id":136831,"date":"2024-12-15t12:00:13","date_gmt":"2024-12-15t17:00:13","guid":{"rendered":"\/\/www.g005e.com\/?p=136831"},"modified":"2024-12-15t17:10:10","modified_gmt":"2024-12-15t22:10:10","slug":"why-cpas-are-best-positioned-to-become-financial-advisors","status":"publish","type":"post","link":"\/\/www.g005e.com\/2024\/12\/15\/why-cpas-are-best-positioned-to-become-financial-advisors\/","title":{"rendered":"why cpas are best positioned to become financial advisors"},"content":{"rendered":"\n\n\n
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oliver<\/figcaption><\/figure><\/td>\n
blake oliver<\/a> is a cpa and the founder and ceo of earmark, an app that offers nasba-approved cpe and irs-approved ce credits for listening to your favorite accounting and tax podcasts. he also co-hosts the accounting podcast<\/a>, the world’s most popular podcast for accountants.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

you have a lot of advice to offer beyond taxes.<\/strong><\/p>\n

by blake oliver<\/i>
\nthe holistic guide to wealth management.<\/i><\/a><\/p>\n

\u201cisn’t it ironic? we ignore those who adore us and adore those who ignore us.\u201d \u2013 author ellen hopkins<\/p>\n

every cpa i know wants to help clients make the best financial decisions. study after study shows cpas are their clients\u2019 most trusted advisors because they have integrity, are prudent, and don\u2019t engage in the hard sell, especially when it comes to financial services<\/strong>.<\/p>\n

more: <\/b>how wealth management has evolved<\/a> | introducing you to a fulfilling return on relationships<\/a> | rory henry upends the traditional accounting firm<\/a> | why now is the time for cpas to embrace wealth management<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/h4>\n

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most cpas claim to do tax planning. but how can you do proper tax planning without knowing a client\u2019s financial goals? you need to know much more about a client than merely their tax liability. yet that\u2019s often where the accountant\u2019s relationship with their client stops every year. how many people have a great tax guy\/tax gal whose only goal is to minimize their client\u2019s tax liability? that\u2019s their job, right?
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\nso, what do they do? they advise their clients to put all their money into retirement accounts that they can\u2019t touch until they\u2019re 65. it seems like a prudent thing to do. but suppose the client wants to retire at age 60 or even 55? you may end up doing them a disservice by optimizing for tax mitigation if you\u2019re not helping them maximize their wealth.<\/p>\n

why cpas are reluctant to offer financial planning services<\/strong><\/p>\n

this may surprise you, but cpas are generally not concerned about lacking the technical expertise for financial planning services; they\u2019re more concerned about lacking soft skills. unlike tax or financial statement preparation, financial planning doesn\u2019t have hard and fast rules. there is no gaap or ifrs rule to tell you exactly when a client should retire or how much risk they should be able to handle in their portfolio.<\/p>\n

areas such as financial planning, retirement planning and wealth management are much more subjective. so much of it falls under the \u201cit depends\u201d category, making many cpas uncomfortable. people\u2019s long-term financial goals are much more personal than paying taxes, and a lot more emotion is involved. to be a financial planner or wealth advisor, you must have intimate conversations. i realize you may not be comfortable with that. \u201cwhat do you really want to do with your life?\u201d is not something you typically ask clients when doing an audit or preparing a tax return.<\/p>\n

but that\u2019s where huge opportunities exist for our profession. when i say opportunity, i\u2019m not just talking about offering high-margin services. i\u2019m talking about using financial planning as a recruiting and retention advantage because that\u2019s the type of work so many more young people would like to do.<\/p>\n

as cpas, we\u2019re used to having conversations around technical topics. the financial planning side is much squishier and more emotional. many clients have negative feelings about their financial situation. it can be a huge source of stress and frustration for them. they may cry in your office. you may find out they have all kinds of debts, and they may think they\u2019re never going to be able to retire. married couples often don\u2019t have the same money values and goals, resulting in awkward conversations. most cpas didn\u2019t study accounting to feel like a marriage counselor.<\/p>\n

but maybe we should.<\/p>\n

rethinking accounting curriculum and training<\/strong><\/p>\n

as cpas, we haven\u2019t been taught to ask a lot of questions. our accounting curriculum teaches us to always have the answer \u2013 that it\u2019s bad to admit you don\u2019t have the answer. we don\u2019t like to admit our ignorance. but in many types of professional services, it\u2019s good to ask a lot of questions. (that\u2019s why i love podcasting<\/a>; i get paid to ask my guests questions that others are afraid to ask them. it means i get to learn something new every day).<\/p>\n

if i had my way, the entire accounting curriculum would be overhauled with less emphasis on memorizing specific rules. the rules are just a google search away \u2013 and soon, ai-powered tools will give us answers even faster. you don\u2019t need to memorize all the standard deduction amounts. instead, you just need to know where to look to check if something is incorrect. today, finding the answer through research is easy. it\u2019s important to approach financial planning advice with a critical mindset. this is what is required to provide the best guidance for your clients.<\/p>\n

i went to a liberal arts college. i was a music major in college. i didn\u2019t study accounting as an undergrad. i took comparative literature, political science, history, film and even chinese. those courses didn\u2019t make me more employable, but they helped me to think critically and to ask good questions. eventually, i went back to school at night to get an accounting certificate. i could handle the coursework just fine, but i was shocked at how little discussion and debate the instructors tolerated from students. the professor would get frustrated if you questioned an accounting standard. clearly, we weren\u2019t there to question whether gaap made sense; we were just there to learn how to apply it.<\/p>\n

this mindset is what\u2019s screwing up accountants. with ai becoming more commonplace, knowing how to ask the right questions will be much more important.<\/strong> that\u2019s what education must do; it must teach us how to ask the right questions. that also means questioning the information that we\u2019re given.<\/p>\n

it\u2019s the opposite of how education has been in the trades for hundreds of years in which you\u2019re just memorizing a process. don\u2019t get me wrong. we still need to know how debits and credits work and how financial statements tie together. but i don\u2019t think we should spend time memorizing all these accounting standards and obscure provisions in the tax code that we might never encounter in practice. we\u2019d be better off learning how to get better in touch with our clients\u2019 emotions, fears and personal relationships with money \u2013 a relationship that is not always in a good place.<\/p>\n

making financial planning services available to more people<\/strong><\/p>\n

we have a tidal wave of boomers retiring. trillions of dollars are set to be transferred to the younger generations over the next several decades. i worry that the next generation is not ready to receive this windfall responsibly. only one-third of the population has a financial advisor, and only two in five have an estate plan. many don\u2019t think they\u2019re wealthy enough for a financial advisor or don\u2019t think they can afford one.<\/p>\n

that\u2019s a huge opportunity for cpas. thanks to technology, we can now start offering group financial planning via an affordable subscription. eventually, subscribers will become full clients when they get wealthier, and their lives become more complicated.<\/p>\n\n\n\n
examples of \u201cone-to-many\u201d advisory subscription offering<\/strong><\/p>\n