The first ever study of CPA financial planning/investment advisory practices, by Moss Adams and the AICPA, shows some fascinating facts about the burgeoning financial planning industry. In effect, the study draws upon detailed information provided by 431 practices falling into various business models across the country. It points out that the growth of CPAs in this practice area has been steady for several decades with a significant rise in the 1990s and continuing into the new millennium.   The survey was sent to the more than 44,000 members of the AICPA, a list composed of solo practitioners, managing partners, Personal Financial Planning (PFP) section members, and other individuals within the Institute who had expressed an interest in financial planning.   In fact, the study shows that the typical financial planning practice is growing faster than the broader industry and has a higher operating profit margin than its peers of the same size.
Some other highlights are:   ·                                For each of last two years, a 34.9% growth   ·                                Average practice size of more than $460,000 among respondents   ·                                Respondents expect additional growth, anticipating 20.6% increase in assets under management   ·                                2.5% increase expected in number of clients over fiscal year 2007   ·                                Average revenue for fiscal year 2006 was $1,619,224, an increase of 16.9% from the previous year   ·                                On current registrations and affiliations, some 38% are affiliated with an independent broker/dealer while 28% are affiliated with an insurance agency/broker, 47% are listed as a registered investment advisor, and 26% have no affiliation   ·                                The motivation behind the addition of financial advisory services at CPA firms is primarily driven by client need, by competitors, by desire for additional streams of revenue, or income.   Economically, its seems that CPA financial planning/advisory firms may hold an advantage over traditional providers of such services, especially at lower levels of revenue, as well. While many CPA planning/advisory firms receive an overhead allocation from the parent CPA firm, which many of their broader industry peers do not receive, the average overhead for CPA financial planning/advisory firms was significantly lower. Therefore, the economies of scale generated by leveraging the existing structure of the CPA firm are leading to higher operating profit margins for those in the CPA-affiliated model.   For more information, visit or  

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