It Works for Them

Seven talented planners tell us whats helped make their PFP practices successful.

ersonal financial planners help clients identify financial goals, organize ways to achieve them and set timetables for implementation. Together, a planner and client look at the clients total financial picture, including income, savings, investments and debts as well as his or her personal situation. Then, they analyze where the money goes and create a budget. Where estate considerations come into play, the planner advises on tax or trust issues. He or she will develop a risk profile for the client, recommend actions to take to achieve short-term to long-term financial goals and follow through with annual evaluations to help the client stay on track.

Karen R. Goodfriend, CPA/PFS, CFP , is a partner of GoldsteinEnright Financial Advisers, a division since 1996 of Goldstein Enright Accountancy Corp. in Menlo Park, San Francisco and San Ramon, California. Worth magazine cited Goodfrienda financial planner for about 10 yearsfor excellence four years in a row. The niche has about $200 million in assets under management.

The firm:
GoldsteinEnright Financial Advisers Inc.

Key staff: Three PFP partners and four additional staff.

Advertising and marketing: Networking in the professional community. Public speaking.

Best resource to get started: Attending AICPA PFP conferences and participating in PFP committees.

Smartest thing we did since starting PFP: We developed niche expertise to serve clients who hold stock options. One partner focused his energies solely on financial planning and investment management services.

Smartest thing we did in the past five years: We hired good people with complementary skills and delegated tax compliance work to colleagues.

Budget breakdown: Salary: 68%; advertising and marketing: 2%; overhead: 30%.

What will change in the near future: Clients who have been through a difficult period in the stock market will seek objective professional advisers. The demand for investment advisory services will increase significantly as baby boomers start to retire or inherit wealth. The financial planning field will become more competitive, however. Well need a broad range of in-depth financial planning knowledge, vast product resources and strategic alliances to stay competitive.

E-mail: .
Web site: .

Alan Rothstein, CPA/PFS, has been a financial planner for 13 years and is a principal of Avon, Connecticut-based Asset Strategies Inc., with offices in Arizona and Wyoming.

The firm:
Asset Strategies Inc.

Key staff: My associate, Kathryn K. Norris, CFP.

Advertising and marketing: Networking helped, as did joining the National Association of Personal Financial Advisers (NAPFA) referral program and being listed in Worth and Mutual Funds magazines as a leader in the financial planning arena.

Best resource to get started: The AICPA and having an associate keep client service on an even keel during tax season.

Smartest thing we did since starting PFP: We added investment management on a fee-only basis in 1989 and priced our financial planning engagements competitively; fees are based on the value of assets under management and range from 0.6% to 1% of account value.

Smartest thing we did in the past five years: Networked with the 20-member All-Star Financial Group alliance, which expanded our access to information and referrals.

What will change in the near future: Im not sure its a time for optimistic speculation. We will contact corporate human resources departments about how their employees can benefit from our services. Were putting together a PFP service package for high-net-worth individuals. We also intend to pitch to investors who have used large brokerage firms and other investment managers and may want a change in strategy and more personal service.

E-mail: .
Web site: .

Peggy Ruhlin, CPA/PFS, CFP, is a principal at Budros & Ruhlin Inc., a 25-person Columbus, Ohio, financial services company with $480 million in assets under management. Shes been with the 23-year-old practice since 1987.

The company:
Budros & Ruhlin Inc.

Key staff: Principals James L. Budros, CFP, Daniel B. Roe, CFP, John D. Schuman, CPA, JD; senior financial planners and CFPs Linda Campbell and John McHugh, CPA.

Advertising and marketing: Schwab Advisor Network, a strategic alliance of PFP advisers. The network vets clients, determines their goals and refers some for planning services. In return, it gets a percentage of fees.

Best resource to get started: Schwab Institutional: Eligible advisers participate in Schwab Institutionals back-office services, which include resources for trading, wealth management, investment, operational and technology support, equity investment research and many other services.

Smartest things we did since starting PFP:

We were fee-only from day one.

I served as president and chair of the International Association for Financial Planning. It brought priceless national recognition to our company.

Budget breakdown: Salary: 55% including principals salaries (32% excluding principals); advertising and marketing: 2%; overhead: 34%; profit: 9%.

What will change in the near future: More high-net-worth clients will seek unbiased, comprehensive wealth management services.

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Web site: .

James A. Shambo, CPA/PFS, is president of Colorado Springs, Colorado-based Lifetime Planning Concepts, PC, a two-person firm with $27 million in assets under management. Shambo began offering PFP services in 1983 and formed Lifetime Planning Concepts in 1995.

The firm:
Lifetime Planning Concepts, PC

Key staff: Shambo.

Advertising and marketing: Responding to inquiries only.

Best resource to get started: Member organizations resources (the AICPA PFP manual, for example).

Smartest thing I did since starting PFP: Decided to control the investment process in-house rather than refer the client to a broker and have him or her disrupt a careful plan by pushing certain products.

Smartest things I did in the past five years: Updated retirement projection software for real world returns rather than constant rate projections. (Clients feel more comfortable when they see how volatility influences their risk.) Require annual update meetings for all clients.

Budget breakdown: Salary: 62%; overhead: 27%; retirement plan contributions: 9%; profit: 2%.

What will change in the near future: I foresee emphasis in two areas: reestablishing trust in the adviser and using alternative investments.

Advisers will have to align their goals with clients, and they will have to stay ahead of the types of available investments and avoid the ones more concerned with market share than with a fair share for the client. Ive been skeptical about the alternative hedge funds that have grown popular in the past few years, but Standard & Poors, Oppenheimer, Tremont and others are developing index approaches to using managed futures and hedge fund strategies that now may truly benefit client portfolios.

Comments: Im using a new risk tolerance questionnaire to better identify each clients risk tolerance level. Its given me a common yardstick for all clients and is helping me make better investment policy decisions. Its available from ProQuest at .

E-mail: .
Web site: .

Chas P. Smith, CPA/PFS, heads Chas P. Smith & Associates, which had $320 million in assets under management as of June 30, 2002. The Lakeland, Florida, firm has been around since 1975 and employs more than 20 people.

The firm:
Chas P. Smith & Associates

Key staff: CPA/PFS professionals Frank M. Ashley, Peter C. Golotko and James M. Luffman.

Advertising and marketing: Bimonthly seminars, television and newspaper ads, brochures.

Best resource: Continuing PFP education through the AICPA and Practitioners Publishing Co. (PPC); training to obtain the PFS designation.

Smartest thing we did in the past five years: Taught other CPAs to add financial services to their practices. This lets one- and two-person firms take advantage of our investment in technology and the learning curve for compliance, reporting and licensing. It has led to an alliance of about 50 firms, and we split fees with them 50-50. Made sure our clients didnt put too many assets into equities.

Budget breakdown: Salaries: 15%; advertising and marketing: 2%; overhead: 16%; profit to partners: 67%.

What will change in the near future: Because many banks, trust companies and financial services companies attract asset management business by offering extras, we will include more financial and tax planning for our fee. The investment advisory/financial planning business is primarily a relationship business, and maintaining a strong personal connection is the key to succeeding.

E-mail: .
Web site: .

Michael S. Tucci, CPA, CIMA, is a principal of Lexington Advisors, with nine members and $125 million in assets under management (90% acquired since March 2000). The company was started in 1997 and has offices in two locations.

The company:
Lexington Advisors Inc.
Lexington, Massachusetts, 800-626-1566
NewYork, NewYork, 212-534-1622

Key staff: Kristine M. Porcaro; CFPs and directors Carolyn B. Howard, Robert P. Miller and Edward Papier, CIMC; behavior specialist Szifra Birke.

Advertising and marketing: Word-of-mouth referrals.

Best resource to get started: The AICPA and state PFP sections and the Investment Management Consultants Association.

Smartest thing we did since starting PFP: We were one of the first companies in the nation to engage a psychologist to assist with our clients emotional needs as they relate to money.

Smartest thing we did in the past five years: Moved away from fee-based planning and accepted only clients that have a minimum of $1 million of investable assets.

Budget breakdown: Salary: 70%; advertising and marketing: 5%; overhead: 25%.

What will change in the near future: Well take on more responsibilities such as mortgage refinancing. We intend to test flat fees and a retainer-based structure, so clients dont have to see market ups and downs in their bills.

E-mail: .
Web site: .

Stuart Zimmerman, CPA/PFS, is a principal of St. Louis-based Buckingham Asset Management, which serves investors and has $500 million in assets under management and BAM Advisor Services, LLC, which serves investment advisers and collectively oversees $1.3 billion in assets.

The companies:
Buckingham Asset Management

BAM Advisor Services
Key staff: Nine principals who are investment advisers and seven other investment advisers.

Advertising and marketing: Director of research Larry Swedroe has written three books.

Best resource to get started: The national regulatory service (NRS). This is the best of the compliance services. They file for you and keep you within regulations.

Smartest thing we did since starting PFP: Decided on passive investing from the start, allowing us to focus on institutional, long-term, low-cost, tax-efficient investing.

Smartest thing we did in the past five years: Started BAM Advisor Services in 1997, which provides back office support services to about 100 firms, mostly CPA-related registered investment adviser practices.

What will change in the near future: Buckingham and BAM were on the St. Louis Business Journal list of fastest-growing local companies each of the past five years. BAM will add strategic alliances, enhancing what we offer CPAs. Firms that manage assets using a passive, academic approach and outsource back-office functions probably will do well.

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Where to find March’s flipbook issue

The Journal of Accountancy is now completely digital. 





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