Last week I saw an article in my local suburban newspaper detailing how a number of local banks and insurance companies were looking to bolster their financial planning offerings and services.

The piece detailed how august institutions such as Chase, Northwestern Mutual and Bank of America were each planning to add anywhere from 10-30 representatives in their branch offices by pairing select customer demographics with products and/or services.

For example, at a number of new offices of Chase, the financial services concern revealed that it was establishing a private banking unit and together with J.P. Morgan advisors, was targeting high-net worth individuals with investable assets from $500,000 to $5 million as well as organizing family-office type services.

Bank of America meanwhile, said it is closing in on its previously announced efforts to double the number of its Merrill Edge financial solutions advisors to more than 1,000 nationwide by the end of this year. Their customer sweet spot by comparison is consumers with $50,000 to $250,000 in assets, a demographic the bank described as the fastest-growing segment in the financial services industry.

The institutions said the expansions stem from the search for new profits and the continued uncertainty in the economy and markets.

I bring this up only because the article triggered an immediate recall of a past presentation of a study from QuickBooks parent Intuit titled the 2020 Report, which projected over the next decade that competition to CPA firms will only intensify as new competitors - i.e. banks, and financial institutions will compete for many niche services, especially financial planning.

Since an estimated 100,000 CPAs provide some form of financial planning to their clients, this may seem more than a bit disconcerting, since many mid-level CPA firms don't have nearly the resources to effectively market their expertise and services versus a commercial lender with hundreds, if not thousands, of branches.

But if that's doesn't set off even a faint alarm there's also fast encroaching competition at the lower end as well as outsourcing and automation that will begin to supplant accounting, professionals, particularly for  routine and lower-value services. 

For example, giant discounter Wal-Mart was offering tax-prep services by siting Jackson-Hewitt kiosks in their stores.

You don't have to wait until 2020 to be cognizant of the fact that competitive threats to your practices won't necessarily come from other CPA firms but from the local banker or the insurance agent as well. Firms that take a proactive approach to meeting that challenge will probably be around to read the 2040 report. And the ones that don't will likely present real estate opportunities for others.


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