Before we get into the details of what I think is mandatory in a financial planner's tool kit, let's level-set ourselves with what financial planning is all about. Financial planning is the process of making the best use of a person's resources to achieve their life dreams and objectives, through all types of circumstances, economic conditions and the unknown changes that are certain to put up obstacles and roadblocks forever.

The process has a series of defined steps that I believe are truly necessary to deliver financial planning services to clients. The process begins with the discovery of facts, circumstances, and goals and objectives. This is followed by analysis of where your client currently stands. Then come your recommendations, which are followed by the implementation of any changes or recommendations that are needed to improve the chances of your client achieving their vision for their future. The last part of the process is to monitor progress and assess the tactics being utilized, with advice rendered for course or tactic alterations as needed.

This process is applied to all of the financial moving parts in your clients' lives. These parts include cash flow, a detailed understanding and analysis of income and expenses today and forecasted into the future. Then the planner should undertake a detailed analysis of the clients' risk management and insurance plans, their investment plans, income tax planning, retirement planning and estate planning. Many families also have sub-specialty issues such as education planning, special-needs planning or business succession that also need your attention.

If I sound like a purist, that would be true. I feel that doing anything less is a genuine disservice to any client. In my practice, if a client wants only segmented advice where I feel there are other significant gaps that need attention, I will decline the engagement. In the short term, this may in fact be a revenue depressant. But in the long run, I end up working with the clients that I want, and making what I consider to be the highest and best use of my 34 years of experience and wisdom, and all in the clients' interests.

If you haven't figured it out already, I'm not a huge fan of financial planners who pitch planning, but then ignore all of the other important issues that can derail a family's plan after they get oversight of the client's assets. I understand why many planners resist holistic and proactive financial planning. It is complex and time-consuming, and requires in-depth knowledge and outside resources to adequately serve in so many diverse subject matters. But just as the head coach of a professional sports team is completely accountable for the results of the team by relying on subject matter experts in defense, offense, special teams, etc., so too must the planner learn to choose their subject matter support personnel in a way that is likely to maximize professionalism and the quality of the advice.



The toolkit that I recommend does not exist in a toolbox anywhere, regardless of how consultants and associations try to market their package and products as a "turn-key" practice management system in a box. The toolkit must be built over time based on the demographics of the practice and the resources that exist within the firm.

The first area needing shelf space in the planner's toolkit is about marketing and communication. Regardless of how smart you are, allowing your planning department to be the best-kept secret in your community is a fatal flaw made by any CPA planner. Your community includes your staff, clients, other professionals and every ideal prospect that drives by your office.

If you don't properly position your firm as one where financial planning is a material component of your overall service offering, your clients may position you in their minds as their CPA only, and continue to simply ask you tax questions and refer you more tax return clients.

When you have a good firm with loyal clients, you will grow the financial planning department simply by asking different questions and letting the secret out. If you need confidence that your message will be heard fondly, look back to the American Institute of CPAs' survey from the turn of the century where it was pretty clear that accounting firm clients wanted their CPAs to be more active in their personal financial planning. To this day, I am dumbfounded by firms that ignore their clients' desire for services.

Your marketing and communication efforts don't need to be flashy or include tactics inconsistent with the culture of your firm. Newsletters, client education events, webinars and simply telling your clients and everyone who knows you as a CPA about your financial planning department is a great start. This process of getting the word out is a team sport, and must be supported by staff and partners. This requires that everyone in your firm be fully aware of the offerings and what the benefit of utilization is to your best clients. If you have partners or staff unwilling to participate in the communication of this valuable service, think about taking your talents elsewhere or eliminating the unwilling promoter from your firm.



Equally important in your toolkit is knowledge. It would be a disaster to actively promote PFP services if you do not have the knowledge and resources to deliver first-rate, competent service. CPAs are inherently intelligent and ethical, yet they struggle with this as much as they do marketing and communication. The cause for the struggle is the CPA's desire to know everything before they act. Most CPAs want to know how the "engine works" before they are willing to test-drive the process, and therefore never get anywhere. For me, even after 34 years as a CPA planner, I will never know everything that is needed to implement a comprehensive plan on my own. We all need subject matter experts to participate in the planning process. These may include attorneys, insurance professionals, investment professionals and so on.

The knowledge section of the toolkit comes in two parts. First is your knowledge. I believe that all CPA planners should have a baseline designation such as the Certified Financial Planner or Personal Financial Specialist. This training will help you understand the planning process and realize that all elements of the plan are integrated, maybe even interdependent. Now it is the planner's job to be sure that deep knowledge and professionalism exists in each of the subject matters that are material in the plan. Note that I did not say that you need to be that subject matter expert for all areas - I don't believe that is possible -- but your planning team must be an all-star team of sorts.

This means that building your bench of outside subject matter specialists is critical to deliver expertise across the board. As a planner and head coach, I believe that you are responsible for overseeing the work of these outside subject matter experts, so don't just refer your clients to these professionals. Instead, invite these professionals to participate in one of your client meetings, and not work in a vacuum, informing you after the fact about what happened.



Software is big on the minds of planners. Sorry to burst your bubble, but the Nirvana of one tool that can do it all in your financial planning process does not exist. Most great firms still utilize and maintain several systems to deliver great service.

There may be a core planning and forecasting tool, an investment analytical tool, a CRM system, data integration, income and estate tax planning, along with many other systems that you'd see at a financial planning trade show. Good software is mandatory, but it is no substitute for a caring, well-informed professional and a memo written in the client's language without jargon to memorialize your analysis and recommendations.

A mature practice will invest thousands, even tens of thousands, each year to keep their software current and integrated. Yes, it is expensive to have great software tools, so the smaller firms without scale are at a clear disadvantage here. Unfortunately, most CPA planning departments do not have size or scale on their side, and suffer greatly in the technology department.

The last and perhaps most significant need for the toolkit are human resources. In addition to the lead planner, a successful planning division needs management, administrative, compliance and technical human resources to grow and prosper. For some reason, many financial planners think that owning a small RIA with no employees is an efficient and rewarding practice. I challenge that thinking, and after hundreds of discussions with planners around the country, I stick to my thoughts. Most work too many hours and deliver sub-par services across many of the subject matter areas where clients need advice.

The practitioner who is their own chief compliance officer, financial planner, asset manager, insurance expert, administrative assistant, marketing director, etc., is too busy, overworked, and likely underpaid and undercapitalized to effectively deliver services and grow the practice. If you are this practitioner, go out today and find yourself an administrative assistant to start, and stop doing $10-per-hour work. Then look critically at everything else you do to see if there is a more efficient way to do the work that is better handled by someone else. You need to spend your time on three major areas; delivering great advice, meeting and building better relationships with your "A" clients, and growing your practice to be a better, sustainable business.

To obtain adequate human resources, CPA planners will need to capitalize their business as they would recommend a client do if they wanted to add a division to an existing business or launch a new business, or they will need to affiliate with another RIA who has some scale and the resources for this endeavor to grow and succeed.

CPA financial planners love tools. We love to collect books, designations, tools, software ... all of the latest and greatest stuff. We love to attend conferences, webinars and get into deep technical discussions with colleagues about what may be the "best" tactic for a client. But to succeed in a financial planning business, you must understand that what you think doesn't really matter. What does matter is what your clients' think, and what they want from you.

And this is the easiest part of learning what you need in your firm's toolkit - ask your clients what they are not getting from their current financial planning relationship, and how you can help.

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

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