Lately more articles and videos—in publications like the CPA Journal and the Journal of Accountancy—are popping up encouraging CPAs to become comprehensive financial planners.
According to an article from ThinkAdvisor, “Should Advisers Fear Accountants,” approximately 120,000 CPAs currently play a role in financial planning.
Andrea Miller, director of financial planning for the American Institute of Certified Public Accountants, said the organization is encouraging its members to evolve their skills to provide advisory services. This is evident in AICPA’s Personal Financial Specialist (PFS) designation.
“We believe that CPAs are in a unique situation to advise clients, and we want to encourage them to do more in this area,” Miller told ThinkAdvisor.
Perhaps those CPAs don’t want to do financial planning and they’d rather work with you. In that case, reach out to your clients’ current CPAs to figure out ways to better serve your clients, says a Financial Planning article “Should I …Work with a CPA?”
If CPAs are a looming threat to financial planners’ livelihood, some media reports recommend CFP® professionals become one (for more information visit aicpa.org/becomeacpa.html).
Sharif Muhammad, who is both a CPA and a CFP® professional, said it being both makes tax planning easier for his clients.
Forge Relationships with CPAs
So you’re not a CPA, you don’t want to become one, but you want to work with one. Forging a relationship with your client’s current CPAs would be a logical starting point—especially in an effort to provide your client with the best comprehensive service.
“People will always need advice around taxes, and you need to know enough to know when you’re out of your depth,” Justin Harvey, founder of Quantifi Planning in Philadelphia said in the Financial Planning article.
For Mike Alves, CFP®, CLU®, CRPC®, forging a relationship with a client’s CPA starts with the clients.
“Normally, it’s the client who introduces us to them,” Alves said. “We have an in-person meeting to set expectations.”
That initial meeting is setting the stage for the financial planner to become partners with the mutual client’s CPA.
According to the Kitces.com article, “3 Ways Financial Advisers Can Get CPAs to Actually Refer Clients,” the best time to connect with CPAs is between May and September (well after the tax filing deadline and before the swing of the next tax season). The article also noted that CPAs need help with three things; help with those, and it’s likely they’ll partner with you.
The three key things, writes author Dave Zoller, CFP®, are (get approval from your client first for all of these): (1) communicating with your client’s CPA about any money moves that have tax implications; (2) helping your client’s CPA create a list of all the client’s accounts and whether that account has a 1099; and (3) helping the CPA find missing cost basis of your client’s older investments.
But even when you forge the relationship, you should still be well-versed in tax law, Muhammad said.
“Nothing could differentiate a CFP® professional more than being well-versed in taxes,” he told us. “Especially during a massive tax change like the one we just experienced and especially when you’re dealing with small- to medium-sized businesses as well as certain families whose tax situation could be significantly impacted by the tax law.”
Ana Trujillo Limón is senior editor of the Journal of Financial Planning and the FPA Next Generation Planner. She also edits the FPA Practice Management Blog. Email her at firstname.lastname@example.org, or connect with her on LinkedIn.