Paul Saganey has been partnering with CPA firms on building their financial planning practices.
As president and founder of Integrated Financial Partners Inc., he began working as a financial advisor back in 1985 and eventually settled on a niche of working with accounting firms. “Very early on I started doing estate tax planning for Morgan Stanley and firms like that, working with their high net worth clients,” he said in a recent visit to the Accounting Today offices. “But the challenge was we could never manage the client’s assets. We could only do their estate tax planning work, so about 1996 in Massachusetts they decided to allow accountants to get licensed to share in financial planning revenue. We took our model that was working so well in the brokerage world and brought it to accounting firms.”
About five years ago, he and the rest of his team decided to take his firm, which had been based in the Boston area, and expand it nationally up and down the East Coast and into Texas and California. “The basic premise behind it is we work with accounting firms to help them bring financial planning to their clients,” he said.
Saganey contrasted IFP’s approach with what he called “in-sourcing,” in which an accounting firm hires its own financial planning talent to work with its clients and keeps all the revenue, and another approach he termed “reciprocity,” in which accounting firms and financial planners refer clients back and forth. IFP’s approach is what Saganey called “co-sourcing,” which it uses for services such as fee-based planning, estate tax planning, managing the client’s assets and insurance. It then shares the revenue with the accounting firm.
IFP brings a trained group of advisors who mainly work with high net worth clients. Some of them are accountants who have sold their practices and decided to become full-time financial planners and advisors. “We found a niche over the last 10 years of using financial planning revenue to help fund the exit planning strategies of some of the more senior partners of the accounting firms,” said Saganey. “We had a couple of large firms that were part of BDO Seidman’s affiliate program. We’re helping to fund the exit strategies of retiring partners. It is a significant source of revenue for many accounting firms. But more importantly, it’s the idea of bringing top-quality financial planning advice to that CPA’s clients.”
IFP typically works with a firm’s top 10 to 20 percent of clients, particularly those with a more complex financial situation, such as business owners and individuals with a significant estate.
“Coming in with the expertise of doing business succession work, working with high net worth people, and giving CPAs the confidence to have us meet with their high net worth clients and then sharing the revenue, it’s not just a wonderful opportunity for us and the client,” said Saganey. “The CPA can generate more revenue, but also feel like they’re doing the best they can possibly do for their clients.”