As many of us are looking to finalize our corporate and individual tax return extensions, now is the perfect time to work on that personal financial planning (PFP) business plan you've been putting off! If you're considering making the change and transforming your tax practice, now is the time, especially with the 2024 tax season looming in the distance. Once you decide to transform your practice, it can be a four to eight-month process before you’re able to begin offering investment advisory services. Now is the last call to leverage the 2024 tax season and begin offering personal financial planning services to your clients! Ready? Your CPAlliance™ team is here to explain the process and help you get started!
For those of you who are still on the fence and haven't committed to personal financial planning, I understand. It's a big change. But I'm willing to bet your hesitation is one (or all) of the following reasons that I hear from CPAs. Let's dive into each one of these common FAQs:
How do I manage compliance?
Compliance is definitely a scary subject, especially for CPAs. Adding an entirely new line of business subjects you and your firm to a whole new set of regulatory standards that can be daunting and overwhelming; however, this is where your TAMP partner comes in. Depending on your chosen TAMP, they will be able to walk you through your compliance obligations and provide you with tools and resources to stay compliant. Partnering with a TAMP like CPAlliance™ helps lighten the load of the compliance obligation we all face in the investment advisory business. As CPA Financial Planners who have been advising for over 35 years, managing compliance is second nature to us. We're here to allow you to focus on the most important part of your business: your clients.
Additionally, as Registered Investment Advisors (RIAs) there are several helpful resources available online for you to utilize. For example, the North American Securities Administrators Association (NASAA) publishes general requirements for investment advisors and links to additional State requirements, providing all the resources you need to ensure your remaining complaint.
What if the markets crash? Then, I’ll lose both a PFP and a tax client.
Ah, the markets. Here’s the deal: if you focus on your client’s financial planning first and help them understand how markets perform over time, you’ll be able to set an appropriate expectation on how their financial goals will be met by an investment strategy. From my experience, investment performance is too often measured against benchmarks that many who are not in the financial world don’t understand. The most important benchmark, however, is: Are the returns adequate to meet the reasonable needs of the client? Investments are looked at over a long period of time. It's important to educate your clients on how they can expect their investments to perform long-term so they're prepared for any sudden dips or changes in the market. Gaining a firm fundamental understanding of the markets and portfolio theory, focusing on your client's financial plan, and helping them achieve financial independence is an ongoing process. You and your client will sleep comfortably during the next recession knowing you've not only expected this, but you’ve planned for it.
Do I have time for this? Or how do I make time?
This is the hardest of the questions to answer because there is no TAMP or service provider that can help you completely overcome this hurdle. You can decide to either continue on your path or take a new one—by offering a service clients desperately need. You are in the best position to provide this service while increasing your bottom line and offering an incredibly rewarding addition to your practice. If you want to choose the latter, then you have to invest time in starting your new line of business, finding the TAMP partner for you, and making the change. While it's a lot of time and energy upfront, your efforts and financial investment will pay off in the long run, allowing you to grow your business, improve your work-life balance, and be an all-in-one advisor to your clients.
Over the years, we've helped many CPAs overcome these hurdles, start their new businesses, build substantial wealth for their clients, and grow into formidable firms in the industry. If you want a chance to be up and running by the 2024 tax season, I’d encourage you to act now. If you want to learn more about us and how CPAs are successful in offering PFP services, join us at the South Florida Accounting Show hosted by the Florida Institute of Certified Public Accountants.
If you’d like to learn more about becoming a CPA financial planner with CPAlliance™, reach me directly at smccabe@cpalliance.com or (863) 688-1725.
Shawn J. McCabe | CPA/PFS, CFP®, MSA, MBA
CPAlliance™ Director | Partner