MOST TAX PROFESSIONALS ENTER PFP ARENA VIA BROKER/DEALER: The majority of tax professionals who enter the financial planning business do so by hooking up with an independent broker/dealer firm, according to a report by market research and consulting firm Tiburon Strategic Advisors.
According to the report, "A Synopsis of the CPA Industry & Highlights of their Models for Entering the Investments Business," CPAs use five models to provide financial planning and investment management services: hourly planning; informal, non-revenue-sharing referral relationships; formal, revenue-sharing referral relationships; setting up their own registered investment advisory firm; or becoming reps at independent broker/dealers.
Among tax professionals surveyed by Tiburon, 82 percent use an independent broker/dealer, while 6 percent offer referrals for no compensation, 2 percent offer referrals for compensation, 1 percent have their own RIA, and 9 percent don't offer financial planning.
The report noted that at least 90,000 of the 340,000 members of the American Institute of CPAs provide some type of financial planning services to their clients. Of those offering financial planning, about a quarter are licensed to collect fees and commissions. Specifically, there are 13,900 CPA RIAs and 9,000 CPA Series 6 and 7 reps, while 67,000 CPAs are neither RIAs nor Series 6 and 7 reps, and are only able to collect hourly fees, Tiburon reported.
Only 11 percent - or 10,000 - of the CPAs offering financial planning have qualified for one of the financial planning or investment management designations. According to the report, the CFP is the most popular, held by 59 percent of CPAs with professional financial planning designations, while 31 percent have the PFS designation, and 6 percent have the CFA designation.
According to the report, almost 40 percent of all CPAs are expected to offer financial planning services by 2006.
FINANCIAL EXECS CALL SOX A "GOOD INVESTMENT!" While a majority of financial executives polled feel that compliance with the sweeping Sarbanes-Oxley Act was beneficial for shareholders and has bolstered internal controls at their respective companies, just as many think that Congress needs to revisit the legislation in the near future.
Fifty-seven percent of 222 financial executives surveyed by SOX compliance monitoring solutions provider Oversight Systems felt that SOX compliance was a "good investment" for shareholders, albeit one that carried a high price tag. And 79 percent of respondents said that Sox compliance strengthened their company's internal controls. But while they supported Sections 302, 404 and 409 of the legislation, the vast majority (81 percent) said that lawmakers should re-examine the act in the future.
When asked to identify the benefits of SOX, 46 percent of respondents said that compliance ensures the accountability of individuals involved in financial reports and operations; 33 percent stated that compliance decreases the risk of financial fraud; 31 percent revealed that they have reduced errors in their financial operations; and 25 percent said that compliance empowers the board audit committee by providing it with deeper information.
The survey polled an array of finance-level posts, including chief financial officers, controllers, treasurers, vice presidents and directors at companies ranging in revenue from less than $250 million to more than $5 billion.
FISERV APPOINTS HARRINGTON: Fiserv ISS, an independent provider of self-directed retirement plans, named Julie Harrington vice president of sales.
In her new role, Harrington, 39, will oversee both the strategic planning and execution of marketing for the broad range of products and services offered by the company.
Prior to joining Fiserv ISS, Harrington was vice president of business development for Rydex Investments, and has also held sales and sales management posts at Fidelity Investments, Institutional Brokerage Group and Schwab Institutional.
Fiserv ISS was formed in September 2004, when four of the top trust companies in the country - First Trust Corporation, Lincoln Trust Company, Resources Trust Company and Retirement Accounts Inc. - united to become Fiserv Investment Support Services Inc.
