With as much as 75 percent of CPAs performing some type of financial planning services for their clients, there are many financial planning business models available for accountants who are thinking about wading into that growing arena.One such model is an affiliation with a broker/dealer who has an understanding of CPAs and their client relationships. What follows is a basic overview of four major broker/dealers and their programs.
Dallas-based 1st Global views itself as a business development partner to CPA firms, committed to providing comprehensive wealth management services, with its broker/dealer services being only one facet. It acts as a resource partner, providing operations and administrative support, systems, and education to the CPA.
The philosophy of 1st Global is based on the belief that CPAs and tax professionals are best positioned to provide wealth management services because of their tax planning expertise.
As to investment advice and planning assistance, 1st Global's Wealth Management Services Group assists with all aspects of clients' wealth management solutions, including financial consulting, annuity and insurance planning, and advanced case design.
There is a comprehensive, fee-based asset management platform for CPA affiliates: Investment Management Solutions. Within the IMS platform, affiliate firms can offer their clients a range of solutions, including mutual funds, exchange-traded funds and separately managed accounts. The IMS Unified Choice solution is a unified management account that offers separate account managers, mutual funds and ETFs in a single account, guided by a unified asset allocation program. CPA affiliates can also provide their business clients with a turnkey fee-based 401(k) platform - CompassGold.
1st Global's Wealth Management Academy offers education programs, including an introduction to operating a successful wealth management practice. Matrix workshops focus on the four key components of a wealth management firm: marketing, sales, operations and administration. They focus on both the academic side of wealth management (key issues and solutions), as well as the skills side (including how to generate appointments, organize a client's wealth management issues and conduct a meeting).
There is an Advanced Solutions Program that offers two-day advanced case studies on key wealth management issues, including wealth transfer and estate planning, investment and tax planning, qualified retirement plans, and IMS/fee-based asset management.
In addition, the Wealth Management Academy offers more than a half-dozen monthly Webcasts on topics such as insurance, advanced case design, marketing and administration. There is also a national conference for the affiliates.
Stronger client relationships
Genworth Financial Investment Services has a licensing team that helps CPAs obtain the required securities and insurance licenses. A complete training program is offered, including access to more than 150 teleconferences, half-day seminars throughout the country, and a three-day national convention.
Genworth has a comprehensive offering of products, including mutual funds, annuities, stocks, bonds, life insurance, long-term care and fee-based programs. There is a referring partner program that allows CPAs to receive income by referring clients to qualified Genworth representatives.
A compliance department is responsible for branch-office inspections, along with the monitoring of advertising and correspondence, both written and electronic. Comprehensive back-office support includes the availability of featuring hands-on, experienced securities and fee-based money management service professionals.
Genworth offers a turnkey marketing approach that helps representatives promote themselves through user-friendly, customized communications. With regard to technology, interactive solutions aid representatives in the development, planning and execution of investment solutions.
There are dedicated teams and specialists in investment, insurance (registered and non-registered products), and fee-based planning. Genworth's in-house support team and field specialists help representatives with case design, client presentations and product knowledge.
Geared for the tax pro
Since H.D. Vest Financial Services was founded by a tax professional, it should be no surprise that most of its advisors are tax professionals (some 98 percent), and the training and support is geared toward helping advisors work with tax clients to provide investments, insurance, banking and money management solutions. Vest, backed by banking services conglomerate Wells Fargo & Co., helps tax professionals get the proper licenses and training to work with their clients directly.
Vest provides all the regulatory support for advisors, including having an audit team that visits advisors to help them set up their offices in compliance with NASD and Securities and Exchange Commission rules. The home office answers any supervision questions, provides advertising compliance reviews, makes recommendations and reviews trades for suitability. There is full back-office support. Pre-approved client marketing materials are available, as are personalized Web sites through MyHDvest.com, and online access to marketing ideas and materials via the Client Marketing System.
With regard to technology, H.D. Vest provides access to a full spectrum of technological tools through a secure extranet site, HDVLink. This includes customized editions of Morningstar Advisor Workstation and S&P Advisor Insight for research, sales, diagnostic, portfolio and reporting tools.
Investment implementation can be aided by VestPlan Solutions, a planning application that assesses clients' current financial status and future goals with a professional reporting function; ASAP and Account Wizard, online account set-up tools; the Integrated Brokerage Workstation; and a Trade Management Tool, which allows for streamlined portfolio trading. There is a Report Center tool that can create customized portfolio analysis, performance, asset allocation, cost basis, projected income, and transaction client presentation reports.
The Financial Planning Support Department provides advisors with business-building strategies, technical support, case analysis and product recommendations. H.D. Vest also has advanced planning specialists available in three planning areas: retirement, estate planning and insurance planning.
The Financial Planning Institute is intended to teach advisors, among other things, how to approach clients about financial planning, how to build a partnership with them, and how to close a sale. The Mentor Program permits new advisors to work one on one with more experienced advisors. There also are a national conference, regional and local meetings, and online technology training and self-study courses.
The compensation options vary at H.D. Vest. Some CPAs are commission-based, getting licensed as registered representatives to offer commission-based products such as mutual funds, stocks, bonds and unit investment trusts. Others are fee-only, registering with H.D. Vest Advisory Services as independent advisory representatives to offer hourly planning services, investment plans for a flat fee, and the line of H.D. Vest advisory services. There is also an option to become insurance-licensed to offer risk management solutions to clients.
Two distinct options
Raymond James Financial Services has two programs available to CPAs. If the CPA is either an RJFS financial advisor or a branch owner, they have the ability to provide full financial services under RJFS and can continue their CPA practice as an outside business activity with proper disclosures to clients.
There is also the Professional Partners Program, where a CPA can work with a licensed RJFS financial advisor as a solicitor, introducing the client to the advisor, who works with clients on their financial needs. The CPA is compensated for the introduction by a sharing of the fee. Licensing requirements are different for each state.
An RJFS financial advisor or branch owner is provided compliance support, oversight, and back-office support and access to over 3,500 home-office employees. For those individuals working with the Professional Partners Program, contracts, disclosures, general support and marketing assistance are provided.
RJFS Marketing functions as an in-house ad agency, providing marketing materials, including customized brochures, Web sites and marketing advice for the CPA who is an RJFS financial advisor or branch owner.
With regard to technology, an RJFS financial advisor or branch owner has direct access to software that coordinates financial and investment planning, asset management proposals, and account management, as well as direct access to online trading systems for equities, mutual funds, bonds and annuities. Planning support is available to RJFS financial advisors or branch owners.
Howard Wolosky is the editor of Practical Accountant.
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