Add colour to your practice – become a wealth manager

Accounting Today


Wealth management services can be valuable to your clients, and providing these services can be personally satisfying. Wealth management includes services ranging from estate and financial planning to investment advisory services and asset allocation. Depending on a firm’s typical customer base, these services can target high-net-worth or mass-affluent clients.

By partnering with an experienced financial planning and wealth management firm these services can be implemented succesfully. Through a strong partnership you can expand tax and accounting practices to include wealth management that can boost revenue, grow your customer base and make the most of the downtime outside of tax season. This can also help grow your financial services practice without adding staff. This might seem lofty, but success lies in partnering with an experienced broker-dealer who understands the tax and accountant role in offering financial services. Although most revenue comes from your CPA practice, clients may also need your services as a financial advisor. One way to do this is to offload the heavy lifting to a knowledgeable and trusted third party.

Seemingly insurmountable obstacles prevent tax and accounting firms from garnering the rewards that come with financial services, such as increased revenue, stronger client relationships and more year-round work. Despite concerns about your own abilities to identify the right clients, bring them onboard, develop the necessary expertise, and find the proper partner or other financial affiliate, wealth management and tax/accounting can be the perfect complement to each other.

For the first four months of the year, you are a tax person and you get to know your clients on an intimate level. The rest of the time, you have downtime to pursue other areas. Investigating and managing financial strategies for clients is a rewarding way to spend that time. The tax and accounting professional is generally the only person a couple will consult about their financial situation in any given year. Instead of sending them to someone else who doesn’t know their situation and might take advantage of them, you can help them set up a financial planning opportunity. Value the trust your firm has with tax and accounting clients and shelter them from the bad investment advice being doled out too often. Some financial services companies don’t take the time to understand a client’s needs, don’t act in the best interest of the client and aren’t rewarded for creating long-lasting relationships. They tell the client what they want to hear, post transactions and collect commissions. Then the fallout of these bad moves boil over during tax time. To stem this tide let your investment clients know during tax time that you are also available for wealth management perspectives.

Recognize that you are in a unique position to help your clients improve their financial posture. Building on the trust you’ve already established and the knowledge you have about their current financial status, you can offer insightful strategies for wealth management opportunities.

A shaky economy, high debt and an unpredictable stock market have people striving to be more fiscally responsible. Debt levels are starting to come back down and people recognize that easy money is at an end. Instead, they are buckling down and paying careful attention to what they are doing with their money. Tax and accounting professionals are well positioned to help their clients navigate these new waters. They have all the background, relationship and trust. It’s a natural progression to assist them with add-on financial services and at the same time introducing or expanding financial services offerings can provide tremendous benefit to the image of the firm overall.

In some instances, tax and accounting professionals either start their own wealth management practices from the ground up or they develop relationships with independent practices that result in referral bonuses. Unless a wealth management partner is used, the former option puts the entire burden—expertise and workload—on the new practice’s shoulders while the latter provides revenue that could be kept in-house. Both of these options risk clients’ trust and business if the new practice or the third party supplies them with poor advice.

The reluctance to add financial services in the tax and accounting world is overcome by realizing the strength of the relationship accountants have with their clients, and that most clients are loyal to the opinions of their accountants. Tax and accounting professionals often shy away from adding wealth management services to their practice portfolio because they don’t want to venture into these waters alone. By picking a broker-dealer with an easy-to-use platform, customizable service offerings and “on the ground” regional support, you will have the tools and industry expertise you need to confidently and efficiently work with your clients.

To reach this goal, you have to attract and retain clients. As a tax and accounting professional, you need to do a good job of promoting yourself. Too often a firm simply throws a brochure on the table near the door, hoping clients will pick it up. That’s not enough—you need to talk with your clients and consistently share with them all the different ways you can help them.

Remind your clients of the firm’s financial services at tax time, showing them crossover opportunities such as putting money into an investment. This is a natural time to show the correlation. Also invite your broker-dealer to meet with clients for more extensive planning. Doing so helps put both you and the client at ease about making informed decisions. Another great idea is putting a wealth management brochure in every tax return to illuminate available financial services. It’s all about top-of-mind awareness. If you position yourself properly, when the time comes, they’ll pick up the phone and call you.

Clients need to know that you offer financial services and wealth management services. You must develop a proactive marketing and communications strategy, including discussing your capabilities with current clients during tax preparation time. Don’t be afraid to interact regularly with contacts to provide them with information that establishes you as an expert in this area.

Tax and accounting professionals are understandably reluctant to take on the additional burden of offering wealth management services to clients. However, finding the right broker-dealer is the key to making this practice add-on strategy a success. You may need a wealth management partner with regional support, easy-to-use platforms, expertise in the tax and accounting industry, and marketing tools that help you stay close to your clients. The partner should be able to help strategize complex cases and offer recommendations in a timely and targeted fashion.

Finding the right partner enables tax and accounting professionals to achieve one of their top objectives: strengthening their relationships with their clients. In addition, a knowledgeable partner will help you use time outside of tax season to your advantage and increase revenue for your practice.

Clients are demanding that their tax and accounting professionals be savvy in a broader array of financial services, and revenue is proven to increase with entry into these new areas. Don’t feel like you have to go it alone. The right wealth management partner can help you answer your clients’ needs as you watch your practice grow.

By SourceMedia Research