Increasingly, individual clients are looking for a single source of tax and financial services, and CPAs are uniquely positioned to be that source, experts say – provided they’re willing to speak the same language clients do.

In a session on “The Future of Services to Individuals” at the American Institute of CPAs’ Engage 2017 conference, the director of the institute’s PFP Division, Andrea Millar, said, ““One hundred and twenty thousand CPAs today are offering financial planning – but only a portion call it that. We need to call it what consumers call it, or they won’t recognize that we’re offering it. If you call yourself a CPA financial planner, that’s what will resonate most.”

Besides needing to use language that will match client expectations, CPAs also need to round out their service offerings.

“Tax won’t be enough on its own, but it’s a huge advantage,” Millar said. “How can you work in these areas if you don’t understand the tax implications?”

Many accountants are already offering tax, retirement and estate planning services, and would only need to add investment management and risk management to give clients much of what they need, Millar explained. “Clients are going to be asking more and more for one point of contact,” she said. “Just doing tax planning may be fine now, but it won’t be enough in the future. We really need to move our tax professionals along, because that’s going to be the expectation from clients – that they can put the whole picture together.”

In many cases, accountants have eased into these kinds of services. “A lot of CPAs are offering financial planning, but don’t even know it. They evolve into it through helping their clients,” said co-presenter Lyle Benson, president of wealth management firm L.K. Benson & Co. and an immediate past chair of the PFP Division, adding that, “There’s a misconception that CPAs moving into this area need to sell investment products, and nothing could be further from the truth. There are lots of CPAs with great financial practices who delegate that out.”


Keeping the edge

Tax expertise and an ability to take a holistic approach to the client’s entire financial life, as well as their status as most-trusted advisor, are the advantages CPA financial planners bring to competing for clients’ business, but Millar and Benson warned that those advantages aren’t permanent.

“Other providers are moving into this area,” Millar said. “Investment advisors are adding tax compliance, because clients want to come to one place to get all these services. These other providers are seeing the stickiness of tax. We need to get ahead of this, or we could lose clients.”

She noted that the number of investment advisors providing tax services to individuals nearly doubled from 2013 to 2015, and that many non-accountant wealth management firms are adding tax services. “They’re adding services to try to show their value.”

Benson pointed out that CPAs need to leverage technology more, even in areas where it may seem like a direct threat. “Technology can make us more efficient – it has certainly made our tax practice better,” he said. “We need to embrace robo advisor technology, and focus on the area where we bring the most value – understanding the client.”

And CPA financial planners will even need to make sure their credential is the one that clients value. “In the surveys that we’ve done, CPA financial planner is the credential that clients love,” Millar said. “That’s working for today, but it may not work tomorrow. You may need another credential in the future, so keep an eye on that.”


AICPA Personal Financial Satisfaction Survey

Now is the time

With all those challenges in mind, right now is still a great time to build out a comprehensive financial planning offering. “Now is the time to solidify our position,” Benson said, pointing out that the near future will see a $15 billion wealth transfer from the Baby Boomers to their heirs – which will translate into an enormous planning opportunity.

“You need to be intentional about it,” Millar urged the CPAs in attendance. “Don’t wait for clients to ask you questions. Tell them what you offer, and go out and get the skills you need.”

And don’t forget another of the CPA’s key advantages: the depth of their relationships with their clients. “Clients will expect you to really know them,” Millar said. “Knowing your client deeply so that you know what’s meaningful for them, is important.”

Benson echoed that thought: “We need to be great listeners to our clients, to empathize with them and really understand their goals and dreams.”

Daniel Hood

Daniel Hood

Daniel Hood is editor-in-chief of Accounting Today and Tax Pro Today, and has covered the tax and accounting field for over 20 years.