News

Financial Planning a Boon to CPA Practices, AICPA/Moss Adams Study Reveals

In a study of 431 CPA financial planning and investment advisory practices, average revenue jumped by nearly 35% per year.

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CPA Financial Planning Firms are Growing Faster Than the Broader Financial planning Industry

Read the summary of the AICPA/Moss Adams LLP 2007 Personal Financial Planning Practice Study

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Take the plunge!

Market demand and the state of the economy are drawing more CPAs into financial planning

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“Slott to advisers: 'Get visible, Get remembered'”

A high-tax environment can be a win-win for clients with a Roth IRA and for financial advisers who would like to expand their businesses, according to financial guru Edward A. Slott. “People are looking for true advisers: Do they have retirement distribution planning advice? Can they do tax planning?” he said.

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Financial Planning a Boon to CPA Practices, AICPA/Moss Adams Study Reveals

NEW YORK (April 28, 2008) – CPA financial planning and investment advisory practices are enjoying significant revenue growth and are expanding at a faster rate than their non-CPA competitors, according to a study released today by the American Institute of Certified Public Accountants and Moss Adams LLP.

The study of 431 CPA firms and CPA-affiliated firms reveals that between 2004 and 2006, average revenue for these practices jumped by nearly 35 percent per year.

About half of the study’s respondents began offering financial planning and advisory services between 2000 and 2007, whereas 35 percent began providing these services in the 1990s. Only 15 percent reported having financial planning practices prior to 1990.

“The information gathered through this survey provides a road map for CPA firms of all sizes, both firms that are contemplating entering this niche area and those with more established practices,” said James Metzler, AICPA vice president, small firm interests.

“Given client needs and demographics, financial planning and advisory services are a natural offering for CPAs,” said Rebecca Pomering, principal at Moss Adams LLP. “There are a number of ways to approach the business and through this study we have been able to analyze various business models and the degree to which they have been successful. The result is great information for both CPAs currently in the advisory business, as well as those considering expanding their service offerings.”

Client demand for objective advice is one of the primary factors contributing to the growth of CPA financial planning and advisory practices. However, CPA firms are also experiencing competition for business and seeking additional revenue streams.

“Clearly, financial planning is viewed by many CPA firms as an increasingly attractive practice niche,” said Lyle Benson, CPA/PFS, who served on the study’s task force. “The growth we’ve seen is evidence that the public is increasingly turning to the CPA as a preferred source of financial planning and investment advice.”

The 2007 AICPA/Moss Adams CPA Financial Planning Practice Study was conducted from October 11–November 15, 2007. Survey questions largely focused on business characteristics, as well as financial performance during the 2006 fiscal year. A full methodology is available.

Hard copies of the 2007 AICPA/Moss Adams CPA Financial Planning Practice Study are available for $95 for AICPA members and $195 for non-members. AICPA PFP Section members receive a 20 percent discount off the AICPA member price, and all survey participants will receive a complimentary hard copy. Additionally, an electronic version of
the Study’s Executive Summary will be available online. To order a copy of the study, please visit: http://pfp.aicpa.org/. Electronic copies of the entire study are available for purchase at 20 percent off the hard copy price.

About the AICPA
The American Institute of Certified Public Accountants is the national, professional association of CPAs, with more than 350,000 members, including CPAs in business and industry, public practice, government and education; student affiliates; and international associates.

It sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state and local governments; and non-profit organizations. It develops and grades the Uniform CPA Examination.

About Moss Adams LLP
Moss Adams LLP is the eleventh largest accounting and consulting firm in the United States. The company maintains a team of industry specialists providing consulting, accounting, tax, and valuation services to hundreds of financial planners, investment managers, independent trust companies, independent broker-dealer firms, and other financial services organizations throughout the U.S., Canada, and Australia. Clients also include major industry associations, insurance and fund companies, and a host of other firms prominent within the financial services marketplace. For more information, please visit www.mossadams.com/industries/financialservices.

View and download a PDF of this news article now

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CPA Financial Planning Firms are Growing Faster Than the Broader Financial planning Industry

The AICPA/Moss Adams LLP 2007 CPA Personal Financial Planning Practice Study is the first study of its kind that analyzes and gives guidance on best practices, key benchmarking data, traits of the most successful CPA financial planning firms and much more.

The study shows:

  • CPA financial planning practices are growing faster than the broader financial planning industry
  • What the most successful firms are doing to stand out from other firms
  • How to enter this lucrative niche practice area

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Take the plunge!

July 8, 2009
By Liz Gold
From http://www.webcpa.com

Market demand and the state of the economy are drawing more CPAs into financial planning.

For those CPAs thinking about expanding their practice to include financial planning, experts in the area offer the same three words of inspiration uttered by sports fanatics everywhere: "Just do it."

Most financial planners point to the economic downturn as an advantage to providing yet another valued service to their clients, many of whom have been overwhelmed by the current financial climate - especially since CPAs are already seen as their most trusted advisors...Read Article

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Slott to advisers: 'Get visible, get remembered'

By Darla Mercado
March 31, 2009
From www.investmentnews.com

A high-tax environment can be a win-win for clients with a Roth IRA and for financial advisers who would like to expand their businesses, according to financial guru Edward A. Slott.

“People are looking for true advisers: Do they have retirement distribution planning advice? Can they do tax planning?” he said.

“People make up more in good tax planning than they lose in the market, but the opposite is also true: You can lose everything because of poor tax planning,” Mr. Slott said. “If your client loses that money, so do you.”

Mr. Slott, a certified public accountant at E. Slott & Co. LLP of Rockville Centre, N.Y., spoke this morning at InvestmentNews’ third annual Retirement Income Summit in New York. His presentation was titled, “Tap the IRA Rollover Bubble Now: Three Essential Actions Advisers Can Take to Capture IRA Assets in Turbulent Times.”

Mr. Slott gave three rules for advisers to live by: “Get educated, get visible and get remembered.”

Higher federal and state taxes are coming, but investment values are depressed and a bonus awaits in the Roth IRA for the tax-savvy adviser, he said.

Similarly, though a conversion to a Roth IRA from a regular individual retirement account will ring up taxes, clients need to understand that putting off those taxes by waiting to convert will, in fact, worsen the blow later.

“If you don’t pay the tax now, it doesn’t mean the problem goes away. It only comes back later, at a higher rate on a higher balance,” Mr. Slott said.

The fluctuating state of estate tax rules presents advisers with another opportunity.

For instance, the estate exemption is $3.5 million this year, up from $2 million last year, but the values of estates have fallen. Clients with IRAs can stretch them or pass them to their grandchildren free of estate tax, Mr. Slott said.

In the event that an estate is depleted, life insurance can help make up the difference and provides another benefit, as money inside the life insurance will grow tax free outside the estate.

Mr. Slott also pointed out that advisers can save themselves costly errors by reviewing wills, trusts and beneficiary forms every time there is a life event, such as a birth, death or divorce.

Advisers should also step up their visibility among their competitors.

“Now is the time to get out there: 90% of your competitors are hiding under their desks,” Mr. Slott said. “If you have any marketing dollars at all, now is the time.”

Disenchanted clients have parted ways with advisers who haven’t met their standards, and they are searching for advisers that they trust, Mr. Slott said.

Finally, advisers need to make a lasting impression on both their prospects and their clients. In-depth tax and estate planning — and other services that make an adviser unique — will get clients engaged, Mr. Slott said.

“That can only be done if you’re educated, visible and have something to say other than, ‘buy these stocks and bonds,’” he said.

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