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Why CPAs Should Partner with a Retainer Fee-Based Financial Planning & Wealth Management Firm—Now

Partnering with a retainer fee-based financial planning and wealth management firm holds many significant benefits for CPAs interested in providing personal financial planning services to clients, among these: reducing or eliminating conflicts of interest, facilitating better adherence to regulatory compliance, and improving alignment of incentives with clients’ financial objectives. It may provide access to fresh, innovative ideas, cutting-edge solutions, and deliver additional value for clients, while your team can focus on its core business.
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Financial Services Support for Your CPA or Accounting Practice

"As a CPA, the quality of the advice that you provide to your clients is of the highest importance. When you partner with a financial services provider, you are entrusting your relationships. It’s important they will be able to deliver the high level services your clients require."

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Learn more about how 4Thought partners with CPAs

With tax season squarely in the rearview but for any lingering questions still circulating among clients regarding the recent federal tax overhaul’s exact ramifications on returns next year, now is the perfect time for CPAs to take stock of such concerns and inquiries, and assess their own individual places within the greater trajectory of the financial industry, overall.

Overwhelmingly, the looming impacts of the Tax Cuts and Jobs Act of 2017 dominated this year’s conversation, and for good reason. It is the most sweeping and seismic overhaul of federal tax law since 1986, and its extensive changes hold unprecedented implications for state tax systems—leaving many tax filers from across the financial spectrum scratching their collective heads.

Yet accompanying those concerns—and perhaps even clocking in at a close second—were undoubtedly queries regarding personal finance, and specifically, financial planning and wealth management.

How will the new tax plan affect my investments? How will this impact my 401k? What are your recommendations going forward?

It makes perfect sense your clients would ask you. Why wouldn’t they?

News Flash: People trust CPAs.

As you know all too well, your professional role in clients’ lives involves much more than simply meeting once a year for a half hour or so, punching their respective earnings figures from their W2s and any relevant deductions into your computer, calculating returns and preparing their annual tax filings.

There is a personal investment interwoven within this relationship, as well, evident in the mere fact that your clients will likely stick with you for years, decades, even their entire lifetimes, and often, generations to come—referring friends, family members, and of course, their children, too.

As you are also keenly aware, simply servicing and maintaining these relationships can be much more than a full-time job in itself.

The inevitable question arises, then: How do CPAs and their respective practices continue to provide extraordinary tax preparation and filing services to their dedicated clientele—while also becoming experts capable of extolling and implementing professional and effective personal financial planning advice, strategies, and wealth management services to achieve clients’ fiscal goals?

The simple truth? They can’t—at least not without consequences. They can surely try, but to do so effectively is extremely difficult, and requires time, resources and insights not easily attainable, especially while simultaneously maintaining the high level of tax expertise and commitment demanded by pre-existing clients.

Unless, that is, they recruit the assistance and expertise of a reputable, experienced, highly knowledgeable retainer fee-based financial planning and wealth management firm.

Attention CPAs: The Time to Partner with a Reputable Retainer Fee-Based Financial Planning and Wealth Management Firm to Provide Clients with Objective Personal Financial Advice Is NOW.

Doing So Possesses A Multitude Of Benefits.

As the many tax reform and associated inquiries from clients indicate, the times they are a-changin’—and CPAs’ roles are no exception. The ever-evolving fiscal landscape demands the profession—and specifically, individual CPAs and their respective practices—adapt along with it, or risk not just losing out on the accompanying prospective opportunities, but client loss and potential obscurity, too.

One way to help ensure you and your clients successfully navigate the uncharted associated fiscal compliance waters ahead—while enabling you and your team to focus on the million-and-one-other pressing duties and responsibilities inherent in the simple day-to-day operations of your practice—is to partner with an experienced, reputable, retainer fee-based financial planning and wealth management firm.

Doing so could help reduce or even eliminate many conflicts of interest, ensure regulatory compliance, and better align your services with your clients’ financial objectives, overall. It grants access to “Idea Guys,” who develop and implement cutting-edge, proactive strategies and solutions to help ensure your clients achieve their lifelong financial goals. It supplies additional value for clients. Providing access to such services can also create an additional revenue stream for your business, with ancillary income.

Perhaps most importantly, entrusting the execution and maintenance of personal financial planning services to an experienced and reputable retainer fee-based financial planning and wealth management firm will give you that invaluable peace of mind that comes with knowing your clients are in good hands, enabling you and your practice to focus on what you do best: delivering exceptional tax preparation and advisory services to your clients, and growing your business.  

So, let’s discuss some of these advantages.

Regulatory Compliance & Fiduciary Responsibility

CPAs are regulated by state boards of accountancy, which hold the authority to impose sanctions for certain violations. National trade association the American Institute of Certified Public Accountants (AICPA), for example, also dictates specific standards of professional conduct member CPAs must abide to, outlined in a Code of Professional Conduct. These are in addition to state and federal securities regulatory requirements (in the context of providing wealth management services).

The AICPA Code mandates members must be free from conflicts of interest, shall not knowingly misrepresent facts, and must maintain integrity and objectivity. CPAs must also maintain independence.

Conflicts can arise from a number of situations, some from simply performing typical auditing and attestation services in addition to providing investment advisory services.

Such triggers, as outlined by the AICPA, include:

  • If the accountant renders investment decisions on behalf of audit clients
  • If the accountant “executes a transaction” to sell or purchase an audit client’s investment
  • If the accountant has the audit client’s assets in custody

 

In addition to the AICPA’s aforementioned Code, CPAs interested in adding personal financial services to the list of services provided to clients should also consider other compliance obligations, including:

  • Employee Retirement Income Security Act of 1974 (ERISA)
  • AICPA Statement on Standards in Personal Financial Planning Services
  • Investment Advisors Act of 1940
  • Dodd-Frank Wall Street Reform & Consumer Protection Act
  • SEC Custody Rule of the Investment Advisers Act of 1940
  • Federal Trade Commission Safeguards Rule
  • Sarbanes-Oxley Act
  • Securities and Exchange Commission (SEC) Interpretive Release IA-1092
  • Gramm-Leach-Bliley Act
  • Financial Industry Regulatory Authority-required emergency preparedness plans
  • More recently in the news, the U.S. Department of Labor (DOL)’s much-talked about new Fiduciary Rule states that any professional expending personal financial planning advice must act in the best interest of their clients. While the implementation of this rule is now under question, the SEC is also reportedly drafting its own set of rules to potentially replace it.

Simply ensuring compliance with all of the aforementioned is no easy task, as the AICPA notes.

“Such compliance issues can have a significant time element attached to them, as well as cost, and must be considered when adding financial planning services to your practice.” —AICPA Personal Financial Planning Section: “The CPA’s Guide to Developing and Managing a PFP Practice

Partnering with an experienced financial planning and wealth management firm alleviates many of these regulatory compliance concerns, since such firms may assume the bulk of the fiduciary burden and associated responsibilities.

 

Reduces Conflicts of Interest

Perhaps the greatest benefit of partnering with a “retainer fee-based” advisory firm is that doing so drastically reduces some of the conflicts of interest innately present within other pricing structures and planning models, such as those “commission-based.” These are more accurately, in practice, salespeople, since their compensation is generally tied to the number and amount of financial products they sell.

As we’ve outlined in previous posts, purely commission-based “financial planners” or “investment advisors” earn more the more such financial products they sell to clients. Thus, it’s a valid concern that their personal financial planning advice may not always be rooted in what’s best for the client—or what’s best to ultimately achieve clients’ financial goals—but rather, what’s best for them!

The retainer fee-based model, in contrast, limits such conflicts, and provides more objective advice, since the relationship is at least partially or even completely free from incentives tied to sales and paid transactions (depending on whether a pure or hybrid compensation arrangement is used).

 

Better Alignment of Incentives with Clients’ Financial Goals

True financial planners and wealth managers take the critical time necessary to meet with clients and understand, outline, and conceptually and quantitatively visualize clients’ lifelong financial goals, and develop a strategic fiscal roadmap for how to achieve such objectives. Comprehensive financial planning encompasses much more than simply doling out investment advice. It includes the coordination of estate planning, business succession planning, and fringe benefit planning, among other components.

Devising, reviewing and executing these strategic blueprints do not involve the sale of financial instruments—the lifeblood of commission-based pricing models—and thus, commission-based advisors lack the compensatory incentives to craft such detailed fiscal roadmaps, or even address these topics at all.

Retainer fee-based advisors, on the other hand, are better structured and aligned toward pursuing and achieving clients’ financial goals. They’re also incentivized to perform as true “fiduciaries”—working solely in the best interests of clients—as opposed to supplying advice based upon the sale of products that monetarily benefit their own personal or corporate finances.

 

Ideas

There’s a saying: “No one has a patent on good ideas.”

Such ingenuity is mission critical to not just weathering the ever-changing financial sector landscape, but successfully evolving along with it, and excelling. Formulating smart, viable ideas—and possessing the imagination, vision and wherewithal to actually implement them—requires a comprehension of the fundamental mechanics of financial markets and strategic financial planning principles derived from years, and even decades, of experience actually putting them into practice. It demands an openness to thinking outside the box, as well as the time and resources mandatory to really consider and contemplate exactly where all these pieces fit together to best serve you, your practice, and your clients.

In actuality, it’s a full-time job.

Teaming up with an outside financial planning and wealth management firm that takes this responsibility seriously and possesses the skills and experience necessary to devise and execute the ideas and strategies best aligned to achieve your clients’ financial objectives gives you and your team a definitive advantage over other CPA practices.

There’s a very real tendency for people to remain set in their ways and resist change. Yet with the financial sector and personal financial planning space, specifically, undergoing a veritable sea change in recent years—and with even more uncertainties expected in the future—remaining static can prove fatal.

CPAs, especially, must embrace these shifts, and prepare for future changes—both anticipated and unforeseen—simply for survival.

Ensuring access to fresh, innovative ideas and proactive, cutting-edge solutions via partnering with an experienced financial planning and wealth management firm can help safeguard against these alterations and ensure your practice is equipped with the tools necessary to thrive—and is therefore an absolute must in this ever-evolving realm.

 

Additional Value For Clients

In the cutthroat field of finance, attaining a leg up over the competition is a must.

Enlisting the expertise of trusted financial planning and wealth management experts and providing clients this extra dimension of financial services makes your practice a more attractive and more all-encompassing firm—signaling to pre-existing clients and prospective clientele a comprehension of finance other CPA practices simply lack.

It’s hard to overstate the inherent value in being able to offer such services. It’s undeniable, really—and passed along to your clients.

The ability to provide clients true, meaningful personal financial planning and wealth management advice opens the door to a whole host of clientele otherwise unattainable. Such services inherently require a deep, even forensic comprehension of financial markets and customized investment strategies—again demonstrating to both current and potential clients you and your practice’s added depth of knowledge and strategic implementation they simply won’t find at other competing CPA practices.

The addition of these services will help transform your practice into a veritable all-in-one stop shop capable of assisting clients seeking multiple, varying levels of strategic financial services—thus, further differentiating your practice and setting it apart from the rest of the pack.

This diversification also requires an extra level of transparency and responsiveness not typically synonymous with traditional CPA firms—again, characteristics that will undoubtedly resonate with clientele and help differentiate your practice from others, and perhaps most importantly, provide additional value for your clients.

This will also resonate with those not necessarily requiring tax preparation services, thus expanding the pool of potential customers and clientele to those already receiving such traditional services from competitors, and thus, potentially luring them away from their respective tax preparation and filing providers.

Other CPA Practices Are Already Adopting Such Services—Meaning: You Will Lose Out If You Don’t, Too.

 

Additional Revenue Stream & Ancillary Income

Expanding your services to include financial planning and wealth management can open a completely new revenue stream to supplement and complement your practice’s signature tax preparation business.

This ancillary income can be utilized in any number of ways you choose, from helping to finance long overdue upgrades to your computer systems and software to paying for license renewals or further certifications. 

The addition of these services also creates a mutually beneficial cycle that feeds both aspects of your practice, for out of planning, comes more tax work, and vice-versa.

 

Cutting-Edge Solutions

In summary, partnering with an experienced financial planning and wealth management firm expands the range of services offered to clients to much more than simply tax preparation, which the profession has become traditionally known for.

This diversification adds not only value inherent to the mainstay of the profession, but to the clients.

Most CPA firms simply do not possess the time nor the resources necessary to skillfully implement such services. Teaming with such an experienced and reputable firm already mastering such valuable strategies, therefore, increases the attractiveness of your practice—and thus, opens it to a wide range of clients that it wouldn’t be capable of servicing otherwise.

For these and all the aforementioned reasons, teaming with an experienced, reputable retainer fee-based financial planning and wealth management firm possesses significant benefits for your CPA practice—and perhaps most importantly, your clients.

4Thought Financial Group is that firm.

 

4Thought Financial Group

Syosset, NY-based financial planning and wealth management firm 4Thought Financial Group specializes in helping clients achieve their financial goals, and facilitating smooth transitions for CPAs and their practices to adopt such services.

It is a Registered Investment Adviser (RIA) and proponent of retainer fee-based fiduciary advice, carefully structured to act in the best interests of its clients. The firm provides comprehensive wealth and investment management services that complement accounting practices and add value for clients. It also offers free Continuing Professional Education (CPE) courses for CPAs interested in expanding their knowledge in these areas, as well as beneficial partnerships that leverage its customized strategies and team. 

 

4Thought Financial Group is an excellent choice as a partner for CPAs interested in expanding their practice’s services to include comprehensive financial planning and wealth management.

Contact 4Thought Financial Group Today, And Let’s Begin Building Your Clients’ Wealth, Together.

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