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According to a 2009 AICPA survey, client retention is currently the most challenging issue confronting CPA firms in the United States.1 This is important to your practice, because offering new services to clients who already trust you is much more efficient, and cheaper, than persuading new clients with the same old services. The more services you can offer your clients, the more loyal they will become.2 And loyal, satisfied clients refer others to you, a cost-effective way to expand your business.
Tens of millions of baby boomers, for example, with their accumulated assets, need help converting those assets to income streams and transitioning to retirement. By providing the solutions they need, you will create satisfied clients who are less likely to leave, paring costs for attracting new clients and potentially ramping up revenues per client.
Incorporating investment planning services into your tax practice can increase your revenue per client and generate more income per hour. By making more per hour, you can choose to lighten your workload during tax season by handling fewer clients or working fewer hours — putting you in better control of your business and your life.
Financial planning revenues can outweigh revenues earned from tax clients alone, while overhead costs stay relatively low. According to a study by Tiburon Strategic Advisors, the average tax practice offering financial services has more clients and earns more revenue per client than a practice offering tax services alone. The study found that the average annual income opportunity for those practices offering comprehensive services topped $200,000, compared to $54,000 for practices that only offered tax services.
Diversifying your practice by adding financial services can help protect your practice from seasonal and business cycle slowdowns. Because tax services and financial planning services are not necessarily interconnected, the two activities can lean on each other. When the tax business is slow, you can focus on financial services, and vice versa. Diversification can help stabilize your income, increase cash flow and give you more flexibility. Knowing you can concentrate on financial planning clients between tax seasons, and that you have the potential to make more money per client, may allow you to service fewer clients, freeing up more time and alleviating income shortfalls when your tax business is slow.
Can you picture your client's face when her child graduates from college? Instead of casting your clients off to the competition, help them save for their children's education, strategize for retirement and plan for the unexpected. Savor the satisfaction of knowing that your clients have addressed essential life goals — and that their dreams are becoming reality.
1. American Institute of Certified Public Accountants, 2009 CPA Firm Top Issues Survey, http://www.aicpa.org/mediacenter/.
2. The statement, “Client retention: Be the advisor your clients can count on,” Maryland Association of CPAs, October 2009, http://www.macpa.org/.
Investment planning services are a natural extension of the services you currently provide. In fact, you're probably providing some form of financial advice now. Clients find it logical to ask you financial questions because you're trustworthy and knowledgeable about their tax and financial situations, making you the best person to provide financial services for them.
Nothing — until you're successful. We're compensated by retaining a portion of the commissions or fees you generate. Because we're only successful when you are, we've dedicated ourselves to providing our Advisors with the best support, training, technology and solutions in the industry. This commitment to your success is why you should choose to partner with H.D. Vest.
With over 4,800 Advisors from all 50 states, we've helped tax and accounting professionals from large firms and small firms, with varying clientele, and from totally different backgrounds, become successful at investment planning services. While we can't guarantee your success, we can tell you that with over 28 years' experience, we know what it takes for you to become successful, and we'll do everything we can to make sure you have the support and resources you need.
Allocation of time is one of the most common obstacles Advisors face. Because we specialize in working with tax and accounting professionals who already have a business to run, we understand the time constraints you face. You will find that we use that knowledge to make sure you have the support and resources you need to do this business efficiently.
Consider the benefits you and your clients may enjoy if you dedicate time to adding financial services to your practice. Your clients will be more satisfied because they're getting on track for their goals, and, as a result, they will refer more clients to you. You will be personally satisfied seeing your clients reach their goals, and your business will grow.
Our alternative Partners Program solution can help you grow your business, save time and raise revenue, while providing a valuable service to your clients.
Absolutely not. Specializing in financial services may trigger expansion of your practice faster than otherwise possible. In addition, you'll be establishing your specialization early in your career, enhancing your long-term credibility as a one-stop tax and financial planning firm.
Many tax professionals, CPAs in particular, have referral networks established to service the financial planning needs of their clients. Theoretically, this is a good way to service your clients' needs while sticking to a single service. Unfortunately, the data from Tiburon Strategic Advisors (www.taxprobestpractices.com) shows that these reciprocal arrangements are not an even trade.
On average, tax professionals who add financial services and help clients themselves have higher overall revenues than tax professionals who refer business to a professional network in expectation of a tax referral. That means either there is no reciprocal referral, or the referrals received do not add the same amount of revenues to your practice as financial services would produce. The data indicates that the average value of a financial planning client is $307 annually. So when you refer one of your clients to a broker, you would have to expect to receive $307 or more in revenue from a reciprocal referral to equal the income generated by financial planning.
If you're interested in growing your practice and increasing your income, adding financial services to your practice is the better business decision.
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