A Financial Planning Convergence

CPAs have an identity with regard to tax and A&A work as everyone knows exactly what role they play. With taxes, it is preparation, planning, and compliance. With A&A, the audit, compilation, review, and write-up work are the special domain of the CPA.

CPAs aren't so lucky with financial planning where their role seems to run the gamut. For some, the role is just estate and/or retirement planning, while others do comprehensive financial planning, insurance advice, college cost savings programs, and other areas. Then there are a number of CPAs who are active investment managers for their clients.

Fee arrangements are also all over the place: assets under management, hourly, fixed, even commissions.

It is hard to distinguish CPAs from others who do one of more components of financial planning, a big group comprised of financial planners, broker/dealers, insurance agents, money managers, lawyers and others.

To be truly successful in financial planning, CPAs have to establish a unique role for themselves. The need for the CPA is there, and more importantly, the time is right. Technology now allows for the aggregation of most of a client's financial information, and analytical tools make it much easier to evaluate and compare the underlying holdings. Couple with that the increased attention to the active and coordinated investment management of taxable, tax-exempt, and tax-deferred investments (namely qualified retirement plans).

Consider also the increased insurance needs, adding disability and long-term care insurance to most people's concerns. Also don't forget tax efficiency and the new complicated investment alternatives, hedge and exchange traded funds, to name just two.

So what would this role be? How about overall financial manager and coordinator? (Give us some time and we can come up with a catchy name for it.) But bottom line, it would be the equivalent of a general practitioner. Someone the client goes to on a regular basis, who takes care of the client's financial health, picks the needed specialist, interprets financial data, and advises the client. Yes, there are a number of CPAs who have done it for years. But the need for this overall financial supervisor of other financial professionals seems to be growing.

CPAs, stake that position out before another professional takes it!