As a young CPA interested in taxation and financial planning, I kept piling on the designations and the CPE to know as much as I could as a personal financial planner. This is how we CPAs are schooled -- knowledge is power. But as I grew as a business owner and professional, I realized that knowledge is only power if you properly apply that knowledge. Knowledge may make you the sharpest tool in the shed, but without the ability to understand your clients and coordinate the efforts of all the subject matter experts in your clients' lives, it's a tool that's likely to remain in the shed season after season.

In the early 1980s, as I prepared for the American Institute of CPAs' PFS exam, I read in Chapter One of the PFP manual that a CPA needs good communication skills to succeed as a financial planner. At the time, I didn't quite get it. The manual went on to say that a financial planner is frequently called upon to be the catalyst for the client to get them to do things that are in their best interests that they don't really want to do. Whether it is their need to complete an estate plan, dot the i's on their business succession plan or buy the insurance they need for the family or business, your clients love to procrastinate. And why not -- most of your PFP-worthy clients have all of their cash flow and lifestyle needs met, and to them, life is good. Now, many years later, I agree. A great financial planner has to ask the right questions and be persuasive in the delivery of their advice.



Being a good communicator is imperative. When it comes to financial planning, the part of communication that is most important is your question-asking and listening skills. As CPAs tend to be educated and wise, it is common for a CPA financial planner's view to be somewhat narrow. While these narrow views are often in the best interests of the client, and maybe even the highest and best use of the asset or issue in question, it is usually the planner's answer. A great planner must come up with solutions that are borne from the client's perspective and feelings, not the planners. A planner can stand on their head and talk to a client about the benefits of diversification as it may relate to any one investment or the family business, but if the client insists on maintaining that sub-optimal allocation, it is the planner's job to assess, document and recommend a course of action factoring in the way a client wants to deal with the issue.

This leads us to a discussion of the types of clients that a planner is serving. To be great is one thing, but to be all things to all types of clients is nearly impossible. A planner should focus on the types of clients that they serve and want to serve, and build their skill set to enhance that service model. A great financial planner will decline to serve a client whose needs cannot be well-met by the planner. This cuts to both sides of the ideal client. For example, I deploy a robust holistic and pro-active planning service that is governed by a 20-plus-page checklist of areas to examine and offer advice. It takes more than 20 hours to complete this process for even a simple case. Therefore, it isn't likely that smaller clients will engage with my team, as they don't want to pay for that diligence and probably do not need such an extensive effort to get the guidance that they need.

The opposite is also true. If a planner is working with smaller, simple cases and thinks that they can handle a very large complicated case just because it walked through the door - good luck. It's hard to be great when you are in unknown territory. This situation can frequently lead to an unsatisfied client experience.

Client selection is even more critical if the planner has any singular subject matter expertise or industry specialization. If a planner comes from an investment background, with little knowledge or experience in matters of risk management, gaps may develop in the plan from that lack of knowledge. It doesn't matter if you have the best portfolio in the world if there hasn't been a thorough review of the areas outside of the portfolio that could ruin the plan. That risk issue may stem from too little or the wrong type of insurance, improper ownership of material assets, or a back-of-a-napkin succession plan for the business or real estate assets held by your client. Similar issues may arise with an industry specialization. If your specialization is with traditional married or single families that are executives of companies, then a new client with multinational issues or a large business may expose the plan to matters that you didn't even think about.



A great planner is like the head coach of a professional sports team. The head coach's job is to help chart the course of the team alongside team ownership, and then empower all assistant coaches to do what needs to be done within their area of specialty to accomplish those goals. The average team in the National Football League has 15 assistant coaches. These assistants are subject matter experts ranging from offensive specialists to strength and conditioning coaches.

In your clients' financial lives, there are many assistant coaches. There are investment and retirement advisors, insurance agents, lawyers, bankers and accountants. For some of our team's sophisticated clients, I've counted over 20 assistant coaches all barking orders and making recommendations to the client. And in most of these cases the client was acting as their own head coach before we entered the scene. Most of these assistants are competent, but there is rarely any professional interaction or coordination, and as a result, significant financial matters often fall through the cracks. A good example that plagues most of your clients is the full implementation of their estate plan. Just look at all the 1099s that will arrive later this month from accounts still under joint names. Which professional will be pro-active enough to see that there are trusts in place for estate planning? Does anyone care that the consequences of not utilizing the trusts now may cause future problems, such as a long, expensive estate settlement process that could have been shortened mightily by simply utilizing the trusts now?

Further complications from your client being their own head coach arise when there are conflicts regarding the advice rendered. Frequently the client is smack in the middle of professional disagreements between their service providers. How many times have you been called by your client with a question about something that an insurance agent or an investment professional recommended, but which you completely disagreed with? I'm not saying that you are right and they are wrong - what I am saying is that decisions are often made based upon a sales presentation or without the benefit of the entire coaching staff's buy-in. A great financial planner will elevate the client's role to that of the team owner, where they can see the entire field clearly and begin to articulate their goals and feelings a bit clearer.

A great financial planner will not only make sure that each significant area is monitored and reviewed regularly, but they will have the systems and processes set up to be sure that this is a part of the overall delivery of planning services. Included within these systems and processes is a method of communicating with the client's other professionals to be sure that we have benefited from their subject matter expertise. From mid-November through the end of December, the focus for my team is to be sure that we have no tax surprises when the client gets to filing season. Each of our client's CPAs are consulted with, with forecasts prepared as needed to mitigate the possibility of missing something from a tax planning perspective. Whether the considerations include a Roth conversion, harvesting gains or losses, or providing guidance on gifting strategies, a competent CPA firm is a welcome and important part of those discussions and plans. As you begin tax season, and recognize that these issues were not well-planned or that you're still chasing the investment person for capital gains and losses, look to upgrade your clients to a holistic, pro-active head coach type of planner.

Subject matter expertise is important. Earlier in this article, I shelved the importance of subject matter expertise in favor of communication skills. It is tough to teach communication skills - although a solid system of what to ask and what to communicate can address many of the problems that result from a lack of communications. But a financial planner needs to understand that it is impossible to be the expert in all areas of financial planning. Even if you spent your entire life studying and researching, it would still be a challenge to understand everything from divorce planning through the unwinding of a defined-benefit pension plan. But nevertheless, the planner must have a good understanding of these issues and be able to go deep in some of the areas of expertise required.

The great planner will build a team of SMEs in two ways. One is for each client engagement. As some clients come to the table with advisors or assistant coaches that may be helpful, the great planner must learn to evaluate these professionals and work with them to accomplish the client's objectives. Each planner also needs a team of experts that they can use as a resource. The resource team can serve as a bullpen for clients that may need a replacement subject matter expert or simply to consult or corroborate regarding what you have discovered and advised.

The combination of art and science is what makes a planner great. As yet another tax season begins, make your resolution to not let open issues fester in your clients' lives. Find them a planner that can serve as head coach, as well as the team who will appear in the Super Bowl.

John P. Napolitano, CFP, CPA, is CEO of U.S. Wealth Management in Braintree, Mass. Reach him at (781) 849-9200.


Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access