[IMGCAP(1)]Most CPA firms have failed when it comes to creating a strong financial planning practice. Before you react, allow me to define failure before you begin to look at your firm’s success.

I say “failed” in the sense that many CPA firms have given a half-hearted effort at building a PFP practice — something that felt like moonlighting to clients, staff and partners alike. Many firms do not have a champion, and may have tried to digest every part of the business — from asset management through marketing and communications — from scratch. The level of complexity is deeper than many think, and many firms become overwhelmed from the burden that is created.



Creating a strong financial planning practice is something that is not easy. But for those who have done it, the rewards of serving at a higher level and deepening client relationships create additional revenue for the firm and more satisfaction by helping clients at a highly personal level.

A strong practice is defined in many ways. For purposes of this discussion, I’d like to define it as a financial planning practice that has a robust service offering and a proactive service model, a service model that goes materially deeper, with better communications, than the traditional financial planning service provider. In the end, it is the clients who will define whether your firm’s financial planning department is strong or not.

Another part of being strong is being strong financially. A financial planning department whose revenues lag those generated from traditional taxation or accounting and auditing work is not strong. A PFP division should rival the tax department in terms of revenues within a few years. After that, a well-run PFP practice should begin to outgrow traditional work from both a revenue perspective and as a client attraction tool.

Now that we know the difference between strong versus weak, let’s talk about how to get there if you choose to do so, or how to evaluate another PFP practice that you may want to introduce to your clients.

A strong financial planning practice will have several important characteristics. The strong firms have a leader focused on the area who is capable of building a strong business. It will also have subject matter expertise, a good marketing plan, be great with client relationship skills, perhaps have a niche market or two, a qualified staff and a solid succession plan. The successful firm also has a business plan for themselves — in other words, they are willing to practice what they preach.

When it comes to building a strong practice, the unique distinction that most CPA firms have is a stocked pond of clients who may be in need of financial planning services. Of course, that is not true for all firms, and the biggest impediment for many firms may be that they do not have the right clients for a successful practice. Finding the right clients is a combination of art and science, but the more successful firms have a significant number of high-net-worth clients with complicated financial lives. This may include business interests, a few pieces of real estate, properties in more than one state, and a taxable estate for federal tax purposes.

When a CPA firm is about to choose a strong leader, the firm should choose someone who has led before with success, and who will make the time to lead. In the CPA world, the leader must be dedicated to financial planning, and not dragged into traditional billable hours or other roles within the firm that will detract from this very important role. This may require two steps backward before the future brightens up. The firm may have to hire someone to replace the billable hour gap for the partner now in charge of PFP, and that partner-in-charge is not going to reach their old revenue stream right out of the gate.

For sole practices or very small offices, your choice is a bit murkier. You can’t stop the traditional work, and must find a way to reduce your traditional workload to free up time to lead a strong PFP effort. This is very difficult to do without a strong partner and good coaching to support your efforts to grow the PFP side.

The topic of subject matter expertise has always been a sticky one for CPAs. As a strong PFP leader, your role with respect to subject matter expertise starts with your issue recognition skills and then your guidance with respect to the integration of outside or inside subject matter experts who may be needed in any given client situation. Those who try to master the various subject matters can spend their lives studying and reading, rather than helping clients. This tendency to master the technical side of PFP before launching your services is sure to slow the success of the firm.



A good marketing plan is imperative. Most firms, even those with arguably successful financial planning departments, frequently suffer in this area. Their PFP department is often something that most clients or centers of influence don’t recognize as a core offering.

Good marketing is simply letting your ideal clients, referral sources and your community at large know what you can do and who would benefit from a relationship with your firm.The first step is good internal communications. For multi-partner firms, each and every partner needs to be comfortable and fully aware of the service model and the client deliverables. Staff should also be aware, as they may frequently be the first line of issue recognition or client conversations.

Good relationship skills are more than being available for your client when she has a question. They start with understanding what is important to your client from a non-financial perspective and helping them to proactively anticipate needs and issues in response to changing circumstances. A strong PFP business will have a communications plan that includes timely notices, a regular newsletter dominated by personal, non-technical, interesting stuff about you and your team, regular calls and several meetings per year.

Being a proactive and comprehensive wealth manager is time-consuming. Your pricing structure must accommodate the time needed to serve your clients well in the areas that they expect and for those issues and areas that arise unexpectedly. Exceeding your client expectations based on their prior experience with wealth managers will serve the firm and its clients well. A service model that is clearly articulated to clients also helps set and then meet their expectations.

Few CPA or PFP firms truly have a niche focus, but when it comes to moving up-market to serve wealthier PFP clients, having expertise in a niche can help distinguish you from many other PFP providers who simply select clients based on how much money they have. Your niche market should be developed based upon any particular passions shared at the firm or with a focus on specific types of enterprises that you currently serve. If your firm has more than a few A-level clients in a specific industry, perhaps you can invest more time in that marketplace and learn more about the industry to better serve your clients. This interest may help build your brand as the go-to firm for owners of businesses in that industry.



Any strong service business needs qualified staff. Under-leveraging the firm’s leader is another error many PFP firms make. Leaders are often mired in details and a low level of work that should be performed by someone else. The strong PFP business needs staff to leverage the talents inherent in CPA and PFP leadership. From the start, the leader needs a solid, full-time assistant. This person will prevent the partner from performing $20-per-hour work and be able to execute the tactics needed for marketing, communicating and servicing certain client needs. Beyond this assistant, the strong practice has other professionals. First may be a young planner who is credentialed or working on it. Beyond that, the strong firm will begin to build an ensemble of professionals from different disciplines for serving at a higher level to wealthier clients. This ensemble can come from your payroll or be a loose ensemble of independent subject matter professionals.

Make sure that someone in your PFP department is ultimately accountable for all moving parts of the plan, making sure that every moving part and professional is working properly and in accordance with the clients’ needs today and as their situations change.



The PFP practice that has a business plan, complete with strategy, tactics and accountability, along with a dedicated staff, creates clarity and confidence for everyone from staff to clients. Your plan should include a marketing and communication plan, and should also have financial forecasts and projections to estimate the investment it will take to get out of the gate or to make staffing decisions for a growing practice.

The strong business plan will include clear language and financing for a succession plan for the most key individuals. That succession may be called upon unexpectedly in the case of premature death or disability. But it also needs to function in terms of a planned retirement date or career change by a key person. Communicating to your clients that the firm has a succession strategy in case their financial planner does not wake up for breakfast is a strong message. You may not think that they care, but they do. It also tells them that you have conviction in your advice and heed it yourself.

John P. Napolitano CFP, CPA, PFS, MST, RLP, is CEO of U.S. Wealth Management in Braintree, Mass. Reach him at JohnPNapolitano on LinkedIn, or at (781) 849-9200.

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