In today's financial services landscape, it is becoming more important for accountants to evaluate the health of their current practices and to implement certain necessary changes to remain competitive. With consolidation happening almost on a weekly basis, financial services firms are becoming the one-stop shop for clients. And if you poll your clients, you'll find out that that's exactly what they want - one trusted place to have all of their financial matters attended to.Accountants are also seeing pressure from the proliferation of low-cost accounting software, companies that are giving away tax preparation services for free or at an extremely low cost, and the fact that the Internet is providing clients access to information that was once the private domain of accountants.

This pressure, along with the clamor of clients asking for financial planning help, is waking many accountants up to the fact that diversification of services is the only viable option for sustained profitability.

There are many professionals calling themselves financial planners. Everyone from stockbrokers to insurance agents is wearing the title these days. When I refer to financial planning, I'm talking about the development of a comprehensive analysis of a client's current financial condition, along with a written strategy for solving the challenges they face.

The implementation of a financial plan often involves the sale of financial products of some sort; however, the plan itself is the focus.

In 1990, the Federal Trade Commission opened the doors for accountants to enter the arena when it mandated that the American Institute of CPAs lift its ban on accountants receiving commissions. Many individual state boards followed suit, and now it's possible for accountants to incorporate financial planning into their everyday operations - and, by doing so, often to increase their revenue.

Perhaps as much as 75 percent of accountants offer some type of financial planning services. So if you're interested in adding financial planning to your list of services and capturing your share of the market, there are three main methods you can use: referral to an outside professional; a strategic alliance with an outside professional; or development of in-house expertise.


This is by far the easiest method of providing your clients with the financial planning help that they need. It involves you making yourself known to the financial planning professionals in your community. This can be accomplished by attending networking functions sponsored by local chambers of commerce. You can also get a list of professionals that your clients currently use and set up an opportunity to talk with them about their services.

Often, the professionals you start referring your clients to will provide you with some form of referral or introduction fee. It is important not to have this fee tied directly or indirectly to any income stream that the professional might receive from a client relationship with someone you referred to them, unless you are appropriately licensed to receive that type of compensation.

Most of the time, this method will not involve the need for you to obtain additional licensure, since you will not be the one actually providing the advice or selling financial products. Many accountants like this approach because it helps them to maintain an unbiased relationship with their clients. They provide the service of vetting the outside professionals and, if need be, finding new professionals if service standards are not met.


For those interested in receiving compensation from the sale of financial products or the development of a financial plan, this is the most popular method employed by accountants today. It is much more difficult and involved than the referral method, but the added benefit of shared revenue helps to ease these concerns for many accountants.

The method begins similarly to the referral method above. First, you need to familiarize yourself with financial planning professionals in your area. You then need to let them know that you are interested in exploring a strategic alliance. Then it's time to negotiate. Your power here is significant, given the fact that you have a trusted relationship with a captured market of clients all looking for financial planning services or in need of them.

Find out what support services that professional has available. Will their firm offer training and study materials for licensing? Will they have ample technology to meet the service needs of your clients? What compensation structure are they offering? What other support services can you envision needing? It is important for you to do your due diligence here and make a prudent decision for the success of your practice.

Once you are appropriately licensed, you need to advertise the new services to your clients. This is, by far, the least developed skillset of accountants today. Marketing prowess has not been developed by accountants for the most part because everyone needs to file their tax returns. Clients often seek accountants out to get help with something they must do. Financial planning is something everyone needs to do, but it's not mandated. If you were to poll accountants who failed when it came to incorporating financial planning into their practices, you would find that a lack of marketing skill was often at the root of that failure. Find out what marketing support services your potential alliance partner can offer you. The investment of time up front will pay dividends in a successful and lasting partnership.


This method is often the most difficult and the most costly to employ. It often entails the establishment of a new business entity within your accounting practice, involves a great deal of additional licensing, and mandates increased overhead in the form of compliance personnel and materials, along with the increased educational commitment necessary to provide adequate services to your clients.

Many accounting practices that choose this method end up buying the expertise, either by hiring professionals, or by acquiring firms that already possess the necessary expertise. The due diligence process extends beyond that of the alliance partner method, in that it is necessary for you to personally vet the services of potential broker/dealers, custodians and insurance agencies. What support will each provide? What technology is available? What software will you need to deliver financial planning services to your clients? These are all important questions that are just the tip of the iceberg.

Once you've successfully navigated your way across the steppingstones for developing in-house expertise, it's necessary to advertise those services to your clients. You might want to consider the use of client newsletters, or drip-mail campaigns. When clients come in for the preparation of their tax returns, you may want to mention the new services available. You can offer client appreciation events or educational seminars showcasing your new list of services.


Each of the methods mentioned above has benefits and drawbacks. It is important for you to invest the time to make a prudent decision. And once you have made a decision ... act. The No. 1 challenge facing anyone is procrastination. Accountants will soon be inundated with tax prep work. It will be very easy to put this off until sometime in the future. Your competition is already making strides in this arena.

Do you want to be left out of the game?

Edward R. Collins, AAMS, RFC (, is a family wealth management consultant.

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