From number cruncher to personal CFO

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In researching my new book The Personal CFO, I interviewed dozens of successful professionals, business owners and retirees. The same theme kept coming up during our discussions: “When I meet with my financial professionals, including my CPA, I feel like I’m just getting overloaded with information instead of getting what I really want—simplicity.”

Clients appreciate all the professionals that are working hard on their behalf. The problem is that there’s nobody in the middle making sure all these talented pros are working together. Sadly, too many financial professionals assume it’s the client’s responsibility—not theirs—to be the orchestra leader who coordinates all the moving parts of their financial life.

Whether you’re a CPA, investment advisor, estate attorney or insurance guru, you’re working in a commodity business in many respects. The individual components of what you’re offering are not much different from what every other firm in town is offering. It all comes down to client service, and the best way to win the service game is to take as many worried as you can off your client’s plate.

Remember, study after study shows that the CPA is the client’s most trusted advisor. There is no one else better suited to step up and fill the role of Personal CFO. If you want to talk about going from delivering numbers to delivering advice, that’s what being a Personal CFO does—delivering advice at the highest level of complexity. Clients really need someone who can sit in the middle and filter all the advice that’s flooding in to them and tell them with confidence: “Here’s what this means for you.”

As a CPA, that’s where you come in.

Getting comfortable in the Personal CFO role

The challenge with this role is not about being a deep expert in a single area (say, taxes) in which you can always say, “I’m going to give you this exact right answer.” It’s about having a broad understanding of multiple financial areas and applying that knowledge to the most important subject—your client.

You’re the go-to professional who makes sure all the stuff the clients say they want done actually gets done. That means you have to manage people (and egos) and provide those experts with direction. And you have to deliver advice to clients. As I’ve written about in the past, this is not about delivering numbers that you can prove are right: it’s about delivering advice…something that can’t be guaranteed and doesn’t always balance.

A new type of mental accounting

When you have a serious health issue, your doctor never says, “You have a 100 percent chance of surviving the surgery.” It doesn’t matter whether you’re having a cataract done or open heart surgery. Doctors never guarantee 100 percent success. They’re going to tell you, “I’m going to do the following things for you that will give you the best chance of waking up.”

Doctors know that certainty is an illusion. So do high-value financial advisors. It’s about delivering a higher likelihood of success for your client and making their lives better through a collaboration of professionals.

I know that’s a mental leap for many of you…sitting in the middle and directing traffic. But, if you want to continue being your client’s most trusted advisor, you have to deliver advice, not numbers. Advice doesn’t balance like debits and credits do. You have to get out of your lane and learn to live with a level of uncertainty. Instead of being on the ground, you’re taking a helicopter into the sky and telling clients where the traffic is and helping them find the best route to their destination.

Single point of contact

When people are in their 20s and early 30s, they generally don’t need a Personal CFO. Life is pretty simple: Go to work, save some money and pay your bills. But as people get older, things get more complex. They have estate planning issues; they have asset ownership issues; they have risk management issues, college tuition and eldercare concerns. They might be in the Sandwich Generation, taking care of school age children while also looking after their parents. How are all those interlocking money issues being managed?

Most successful people act as the CEOs of their family, making the big picture decisions and reinforcing the family’s values. Their lives are hectic and complicated. They have neither the time nor the expertise to be their family’s CFO as well.

Baby steps on the path to thinking like a Personal CFO

You don’t have to go out and get a JD or PFP. You are not expected to do all the specialized advanced planning tasks yourself; you’re simply expected to make sure those tasks are getting done and that you know what’s going on with each specialist who is working on your client’s behalf.

Taxes and corporate structures are what many of my clients need help with, but I’m not a CPA. Instead, I coordinate with the tax experts in my firm who know the ins and outs of my clients’ tax situations. Those are just things they need to get done and they trust me to enlist the best possible people to get them done.

A decade from now, there won’t be an accounting industry or an investment industry, per se. There will simply be a financial advice industry. Many of the routine accounting services you are charging clients for will be done faster and more expensively by technology and AI.

Clients don’t want bookkeeping—they want simplicity and the ability to make better financial decisions. That’s what gives you elasticity in your pricing. Don’t tell clients to talk to their investment advisor to answer a difficult question. Don’t have them track down their insurance advisor or their estate attorney. You’re making clients do all the work—work they’re not interested in doing. Instead, if you can say, “Do you want me to go ahead and talk to these people and handle this for you?” You will see their shoulders relax and they’ll always say, “Yes!”

I know that being an air traffic controller is out of the comfort zone for many of you. But, the more you do it, the better you’ll get. Just make sure you’re spending more time in the Learning Zone than in the Performance Zone at first. Before you know it, you’ll be delivering advice and enjoying all the perks that go with it—more value for clients, and more meaning in your relationships.

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