Planners: Let's Do Tax


The fact that the financial planning firm had fairly recently started a sister tax preparation company should have caught my eye much earlier. The firm, like many other financial planning organizations, works with a number of other professional services organizations, including a lawyer and a CPA, to serve its financial planning clients.

But having its own separate tax prep business, under the same ownership as the financial business, was something that I hadn't paid attention to previously.

"Do many financial planning firms do tax prep," I asked our planner.

Partner Insights

"The smart ones do," was his reply.

It was supposed to be the other way around. CPAs were going to make tons of money on financial planning, and threaten the livelihoods of both planners and insurance agents.

The State of CPA Programs

Sometimes it's difficult to measure the effectiveness of CPA programs. How well do they work?

Associate Editor Carly Lombardo takes a look at the programs that software vendors have established to enlist accountants in influencing potential buyers.

In "Time to Advertise," Lombardo also examines the effectiveness of varying forms of advertising by accounting and reselling firms.

If vendors appreciate the efforts of their channels, they also appreciate having resellers that don't carry competing products. Associate Editor Riccardo A. Davis details how good a deal loyalty is in "Stand by Your Vendor?"

Dealing with wireless technology is another story. Don't get too comfortable with Wi-Fi. Have you heard of EVDO or WiMax? As noted in "Untangling Wireless," they're not all that far in the future.

Some good CPA firms do make money planning. But it hasn't been the avalanche that was predicted. It turned out it was easier for funds to look for experienced planners than to try to bring a bunch of newbies up to speed.

Accounting firms also have a couple of other handicaps. Our planner explained that he had spent time talking to the CPAs at a state society event, trying to teach them about the emotional component they need to sell. That was important since the push for getting into selling securities and funds, came during a bull market when selling was easy. The other issue, he commented, was that financial planners can't ignore clients from January to April 16.

The latter is a rap that has applied to other areas that accounting firms have entered, such as technology consulting. Firms with a heavy tax practice have to get out of the mindset that everything else has to wait on tax season-or hire enough people or organize differently to handle diverse services.

It's doubtful that the CPA franchise can be challenged by financial planners-the tax prep business keeps expanding and many firms make their money on business tax preparation. But CPAs probably don't want to lose the kinds of clients that are educated and affluent enough to visit a financial planner.

So who is paying attention to this trend? The smart ones, I presume.

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