As an accountant, you observe your clients’ business successes and failures every day. However, many accounting firms struggle in their efforts to deliver financial planning services profitably.Why?

Because they go after the wrong market, don’t implement their business model well, or have the wrong business model.


Most firms that provide financial planning pursue the people in the top 5 percent income and net worth bracket. The market competing for their attention is crowded; nearly every investment, insurance, planning and estate-planning firm is focused entirely on the wealthiest. Why compete for the same market that everyone has been ardently pursuing for a long time?

The largest open market for providing financial services is the middle, upper-middle and mass-affluent markets. (The “mass affluent” are wealthy, but not in the top 5 percent.)

This group is estimated to include 108 million households. These are the people who aren’t the top wage earners, and who haven’t accumulated substantial dollars for investing.

Consider that the Financial Planning Association recently reported that less than 3 percent of the middle market is currently being served by its professionally credentialed members.

Is the middle market really so wide open?

Think for a moment about the advertising on any televised sporting event. How many commercials are sponsored by firms wanting to help middle Americans with their finances? The answer is zero. The only financial commercials aimed at the middle market are for credit cards and home equity loans that only help to increase debt load, not to build wealth. Most of the ads are aimed at the affluent for investment, planning and accounting firms.

Not only are those in the middle market not being served, but they also desperately need help. The average savings rate is at its lowest point in nearly 75 years, at negative 0.5 percent. Even during the Great Depression in the 1930s, people were saving more money. In addition, many are carrying substantial debt loads on their homes, and they have high credit card and auto loan balances. Foreclosures and bankruptcies are on the rise, and 40 percent of people live from paycheck to paycheck.

Regardless of the causes, people need help. The key is providing planning services that educate and encourage personal responsibility.

People and society are at risk. Those in the middle market are not taking full advantage of their 401(k) plans, buying adequate insurance protection, or saving for future needs such as emergencies and college education. This puts the financial security of Americans at risk, possibly leading to greater dependence on entitlement programs, which would not be good for the U.S. economy.

A major challenge of providing any service is to make those in the target market realize that they need help. As we enter recessionary conditions, many are more aware that financial disaster may strike them unless they make changes and plans. Financial difficulty is easy to ignore when it is on the news; however, when it happens next door or to friends and family, fear increases that it could happen to you.


People resist planning services because of cost or conflict. Comprehensive planning services usually cost thousands; therefore, they are priced beyond the reach of the average consumer. If they come with a product pitch, many people resist the perceived conflict of interest.

Consumers are sometimes wary of seeking help because of past experiences with a planner in which they were sold a product they didn’t need, given bad advice, or given good advice that they didn’t follow, and they don’t want to repeat the negative experiences. On the other hand, many people are “financially shy” (the intimidation factor) of having to reveal their financial mistakes, mishaps or insufficient funds. Women especially dislike revealing their financial situations to strangers. Some people just prefer to do a lot of their own planning, either because they like to do it themselves, or because they want to avoid paying a fee.

Therefore, the key to cracking the middle market is to address these roadblocks head on. The price must be affordable; instead of a large initial fee, it should be priced hourly, depending on the client’s needs.


Accountants have a broad understanding of most areas in the financial landscape and can easily pick up financial concepts in areas in which they lack expertise. Few understand clients’ situations better than their accountants. Accountants not only understand their financials, but they also understand how clients think, what is important to them, and how they process information and make decisions. They have had years to watch the financial history of their clients’ families. With their understanding of tax implications and their already-established relationship with clients, accountants may be better qualified than many other financial professionals to help clients feel comfortable and to accurately implement their financial plans.

It should be no surprise that in studies asking whom they trust the most when it comes to financial matters, people rate their personal accountants the highest over other professionals.


* Fee-only financial planning. This model is staffed by professionals providing initial and ongoing comprehensive planning and monitoring of all aspects of one’s financial situation. The infrastructure cost is high to provide a high level of expertise, technology and support staffing. This model best fits when aimed at those with high incomes and net worth.

* Product-based planners. This model provides planning and advice in conjunction with products that generate commissions and fees. This approach has the potential for conflicts of interest because of product bias. However, there are many professionals in this category who do excellent planning. This model can be cost effective in both the upper and middle markets.

* Hourly engagements. This model provides advice just for the hours spent with the client and preparing for the meeting. This provides greater flexibility, depending on the needs of the client. Some only want or need consultation for a specific area, and maybe only on an “as-needed” basis. Firms that have focused on providing advice without products or investment management to the middle market have used this approach.


* Technology’s role. The smart way to approach the delivery of financial planning services is to envision where it will be in five years, instead of looking only at the current business models. Cerulli Associates, a renowned financial services research firm, believes that consumer-based technology will be key to economically providing financial planning to the middle market. Therefore, the new model for helping the middle market will be focused on technology’s ability to simplify the complex.

You’re aware of how QuickBooks has become the standard for client and accountant interaction for small businesses. In the same way, clients will use personal financial planning software that will become the standard for accountants to use in facilitating financial planning with their individual clients.

* Clients’ role. As in QuickBooks, clients are responsible for inputting their own financial information and for running reports. New financial planning software being introduced is easy to use and comprehensive; the reports are educational and easy to understand. They cover virtually all areas of planning, except for advanced estate and business planning, and tax preparation and planning. Most important, the reports emphasize using accountants and other trusted professional advisors for implementation.

* Accountants’ role. The accountant’s role is to aid in reviewing and interpreting the reports, to answer questions, to help implement some of the plan’s computerized recommendations, and to keep clients accountable and on track by reminding them to keep their data up to date and to review it regularly. This maximizes time spent on creating and implementing solutions, and it eliminates the 10 to 40 hours it would take the planner accountant to construct a financial plan.


* Increased billable hours. Expanding hourly engagements creates the opportunity and an automatic system to schedule client meetings, thereby increasing billable hours during non-tax season times.

* Gain reciprocal referrals. You will probably need to refer your clients for legal, investment and insurance needs. Therefore, you are able to match them to other professionals who are a good fit. By increasing the number of referrals you send to attorneys and financial advisors, you will increase the likelihood of reciprocal referrals.

Also, when your clients arrive at the office of the other professional, they will have a plan in hand and will be primed, generally educated and informed about the products and services they may need.

* Limit liability. Client-based planning minimizes the accounting firm’s liability, because the clients are responsible for their own accurate data input, and the insurance and investment responsibilities are being handled by other specialists. This also eliminates conflict-of-interest risk, because products aren’t being sold.

Whichever model you decide to adopt for your practice, be sure to closely examine the market you want to pursue; the investment of time and money to create and maintain it; and the errors and omissions, investment performance, and product liability. Lastly, develop a business model that’s not only profitable, but is also more enjoyable in the long term.

Kent Irwin, ChFC, CLU, CAP, is president of, in Columbus Ohio. Reach him at

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