Affluent families are not feeling so affluent these days. The financial crisis has left its mark and eroded a tremendous amount of confidence, as well as wealth.

The Spectrem Group reports that in 2008, the number of million-dollar households declined 27 percent and the number of households between $1 million and $5 million was down 29 percent. What's even more astounding, 53 percent of households with a net worth in excess of $10 million dollars think they can run out of money.

The accounting profession is being asked to address client fears like never before. Have you heard these questions asked recently?

Do I have enough money to retire?

How much money can I spend?

How long will my money last?

Will there be anything left over for my family?

How much risk do I need to take?


Charles Darwin said, "It is not the strongest of the species who survive, nor the most intelligent, but those that are the most adept at responding to change." This is a call to action for the accounting profession to respond to the changing needs of their clientele. It's time to change the conversation to uncover your clients' deepest fears and anxieties.

At the Alfa Group at Morgan Stanley Smith Barney, we use a client discovery process called mind mapping to organize thoughts, notes and client information. This process focuses on the seven factors of financial decision-making to determine client needs and serve as the foundation of our client relationships. This process helps ensure that the client and professional are on the same page and have a mutual understanding of acceptable risks and returns.


A recent Alliance Bernstein study of affluent investors (those with $1 million of investable assets) found that less than 25 percent were confident of achieving their goals. Conversely, more than 90 percent of those with a formal wealth management plan expressed confidence in achieving their wealth goals. Not everyone who goes through a wealth management process will feel confident, but the plan itself delivers answers to the questions creating fear and anxiety.

The same study also exposes the fact that as many as 75 percent of investors do not have a wealth management plan. The accounting industry has a unique opportunity to educate and encourage their clients to embrace wealth management.

Affluent families are looking for one trusted professional to coordinate every facet of their financial life. Wealth management provides a comprehensive approach to strong financial stewardship and protecting family wealth. Elements of wealth management include planning around taxes, investments, retirement, wealth transfer, education, insurance, income protection, and business succession planning.


Such a wide range of financial needs requires a wide range of financial experience. Because no one person can be an expert in all these subjects, the best wealth managers work with networks of financial professionals with deep experience and knowledge in specific areas. Effective wealth managers, then, become highly proficient at relationship management, first building relationships with their clients in order to fully understand their unique needs and challenges, and then coordinating the efforts of their expert teams in order to meet those needs and challenges.

Affluent clients want their CPAs to work in a coordinated fashion with their team of advisors to help ensure optimal outcomes. The accounting firm of the future will align itself with trusted partners in all areas of wealth management to protect clients from financial risk. A successful transition for accounting firms to a wealth management paradigm hinges on paying strict attention to critical success factors, including having one partner in charge, creating the right infrastructure, building alliances with advisors in investment management and advanced planning, and ensuring that firm members can readily access that knowledge. Define and educate clients on the due diligence process of vetting your trusted partners. Target partners who are like-minded in helping clients, knowledgeable about the accounting industry and experienced in building alliances.


Providing stewardship of your clients' wealth management process will enhance trust by delivering answers. Coordination of the wealth management process provides a process of due diligence in selecting strategy providers and open communication with those providers to mitigate risk and protect wealth. This business model will enable the CPA to negotiate a fair fee structure for clients while creating a vehicle to generate multiple streams of revenue at no additional cost. The CPA's fee structure is negotiated with the service provider as a percent of the fee charged to their client.

The affluent client doesn't know whom to trust and is looking for help from their CPA. The financial crisis in 2008 and 2009 not only took its toll on client confidence, it also exposed the financial services industry for being ill-prepared to help when help was needed the most. Add the negative publicity from a number of high-profile Ponzi schemes and we have the ingredients for a tremendous amount of trust erosion.

The financial services industry is now in a period of rebuilding trust and demonstrating relevance to clients' success in achieving their goals. The accounting profession is in the position to take a leadership role to advise their clients in making prudent, informed decisions around wealth management and being compensated for that guidance.

Adopters of this new wealth management paradigm have built a differentiating value proposition to their clients and prospects that has strengthened client retention, acquisition and wallet-share.

Andy Strauss is a financial advisor at The Alfa Group, a wealth advisory team at Morgan Stanley Smith Barney in Ridgewood, N.J. Reach him at andrew.d.strauss@mssb. com.

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