Almost half of CPAs indicated that they offer some kind of financial planning services, but a far smaller number have a formally structured practice with their own Registered Investment Advisor or an affiliation with an outside broker/dealer or RIA, according to a new study by Accounting Today, conducted in partnership with Cetera Financial Specialists.
The study is part of “Seeking Success: CPAs in Wealth Management,” an in-depth research and editorial program aimed at identifying the key drivers of success for CPAs who offer wealth management and financial planning services.
The inaugural survey of the program surveyed over 300 leaders and partners at CPA firms across the country on their level of involvement in financial planning and wealth management, the obstacles to developing a planning practice, and how successful firms structure such a practice.
The results indicated that almost half (45.5 percent) offer some kind of loosely defined financial planning services, including family office services, financial planning for mass-affluent and/or high-net-worth clients, and investment advisor for mass-affluent or HNW clients. In comparison, 87.7 percent offer tax planning services.
Most of those firms, however, offer those services “incidentally” to their clients’ tax situations (47.6 percent), while only 18.2 percent of those offering wealth management do so through a formal relationship with a broker/dealer or outside RIA, and only 12.6 percent have their own RIA.
“There was a great deal of interest a decade ago in CPA firms taking up financial planning,” said Accounting Today editor-in-chief Daniel Hood. “But it turns out that not that many firms really went all the way in creating a formal planning and wealth management practice. As firms start exploring this option again, they have a lot of room to expand, and can learn a lot from the firms that have pioneered these services, which is what we’re trying to uncover with our surveys.”
Among the initial survey’s findings: financial planning and wealth management account for 11.8 percent of gross revenue at firms that offer those services, versus 4.5 percent for the broader universe of firms.
The results of this survey and the ones that will follow it will form the basis for a regular column that will appear beginning with the July issue of Accounting Today, sharing data highlights and best practices.