Add financial planning services to your firm

Merger and acquisition (M&A) activity between accounting firms and registered investment advisor (RIA) firms continues to accelerate among larger firms. Accounting firms are attracted to the recurring revenue and potential for increased valuations presented by comprehensive financial planning and investment management. RIAs are attracted to the accounting firm’s existing client relationships as well as the potential to attract prospects who may prefer a one-stop solution for tax, advisory and investment management. But adoption rates for these expanded services among smaller accounting firms has been much slower, why?

M&A, especially mergers of firms in different industries with different regulations, can be quite challenging. Also, certain synergies found among larger firms may not be present among smaller firms. Sometimes, it can be overwhelming for the smaller firms to service tax clients, let alone consider strategic options aimed at futureproofing the practice.

AICPA research has referred to financial planning as “a natural evolution” for accounting firms. This makes sense because the tax professional already knows a great deal about the client’s financial situation and has already built a relationship. Many accounting firms already provide advisory and tax planning services.

Comprehensive financial planning encompasses investment planning, such as asset allocation recommendations suggested by certain financial planning software. It also requires additional licensure and affiliation with either an RIA or a broker dealer. Only one three-hour exam, the Series 65, is required to affiliate with an RIA as an investment advisor representative (IAR).

Affiliating with an RIA requires far less licensure than affiliating with a broker dealer. Moreover, the RIA’s fee-based compensation model is much more closely aligned with that of the accounting firm. This is by far the easiest route to expanding services to include comprehensive financial planning. The RIA should provide turnkey support, including training and oversight. The RIA can also provide investment management services and access to specialists in many areas, depending on the client’s needs. Investment management revenue-sharing opportunities can be very lucrative. Under this scenario, as opposed to a referral, the tax professional is the financial planner and client relationship manager.

The cost of a thorough comprehensive financial plan costs anywhere from $1,500 to $5,000 depending upon the level of complexity; $2,500 is a decent benchmark. Annual updates might cost $1500. It is this recurring revenue that can help annuitize income and increase valuations while strengthening client relationships with more interaction throughout the year.

Comprehensive financial planning is worth serious consideration as a means of futureproofing an accounting practice.

Become a financial planner and/or an Investment Advisor Representative (IAR) with ClientFirst Wealth Management, a fee-only registered investment advisor (RIA) and fiduciary, managing over $160M for individual investors. We do not sell products or accept commissions. Our turnkey system provides the training, support and oversight you need to succeed. We provide the comprehensive financial plan, which is always completed by a CFP® professional, who is always a fiduciary. You then present the plan to your client. We support you every step of the way and can assist with presentations as well. We have discounted our standard financial planning fee for your clients. They will be delighted with their financial plan or receive a full refund.