Future-proof your tax practice by adding planning services

The landscape for CPAs serving individual clients is shifting. Consumers are seeking a primary point of contact to address the full scope of their financial needs, including tax, estate, and gift planning; retirement planning; risk management; and more.

In a recent AICPA webcast, veteran CPA financial planner Lyle Benson, CPA/PFS, and Andrea Millar, CPA/PFS, director of the AICPA Personal Financial Planning Division, discussed why CPAs may want to expand their service offerings and outlined a game plan that CPAs can use to remain relevant in the future. Here are some of their key points:

Changes to the landscape of services to individuals

CPAs who are focused solely on tax compliance and planning should be aware of changes in the marketplace for services to individuals. Rather than just expecting traditional tax services from their advisers, clients are now looking for more comprehensive planning services that integrate tax with retirement, estate, risk management, and other planning areas. According to the Bureau of Labor Statistics, the job outlook for personal financial advisers is expected to increase by 15% from 2016 to 2026, much faster than job growth across all occupations.

With the rapid evolution of technology, some of the work that CPAs have historically offered in the tax arena may become commoditized. Many non-CPA competitors are also recognizing the value of the tax relationship in the full advisory picture and are adding it to their service offerings. Though CPAs are naturally concerned about this shift in the tax marketplace, they can also view it as an opportunity to improve the experience they offer clients.

Tax can serve as a bridge to planning services

CPAs are uniquely well-positioned to offer planning services. They already hold the position of the trusted adviser and are expected to provide services in an objective manner, putting the best interest of the public first. Many already offer some level of tax, retirement, and estate planning, as well as planning for business owners. Their client base often includes consumers with complex tax situations who fit the target market for holistic planning services. The reality is that every piece of the client’s overall financial picture has a tax element that CPAs are well-positioned to address.

Tax planning is still an integral value proposition for individual clients. But it can also serve as a jumping-off point for providing clients with other value-added services. In fact, if clients aren’t already asking you questions about their other financial goals or needs in the course of a tax engagement, you can expand the tax relationship by opening those deeper conversations. (See the Analysis of a Tax Return for Financial Planning Opportunities and Personal Financial Outlook checklists for ideas.)

This year, tax reform has created an excellent opportunity for CPAs to showcase their expertise, ask clients deeper questions about their goals, and weave tax planning into clients’ broader planning picture. Listen to the webcast for more information.

The CPA as primary point of contact

Many financial plans require input from several professionals: not only CPAs, but also estate planning attorneys, investment advisers, insurance brokers, and others. However, if these professionals do not understand the client’s entire financial picture, they may give advice in a silo, without understanding how their recommendations will affect other areas of the client’s financial life. CPAs can provide clients with a valuable and much-needed service by acting as a primary point of contact who can integrate various parts of the client’s financial life. CPAs can coordinate among all the experts working on a client’s plan while providing their own financial expertise.

Practical steps to get started

How can you expand your tax practice to include planning services? For starters, you need to communicate to your clients your willingness and ability to engage in broader planning. Be intentional about telling clients what your service offerings are, rather than waiting for them to ask questions.

You can also use free AICPA checklists to help you review clients’ tax returns in order to identify important issues and opportunities for planning conversations.

The AICPA’s Personal Financial Planning and Tax Divisions can also assist with the transition. These divisions are constantly creating resources to support CPAs and bring together tax and planning content. Visit aicpa.org/pfp/pathway for practical resources tailored to CPAs interested in expanding their service offerings, aicpa.org/taxreform for comprehensive AICPA coverage on tax reform, and aicpa.org/pfp/proactiveplanning for proactive financial and tax planning strategies .

Take advantage of the unique opportunity of 2018 tax reform changes to let clients know about the various services you can provide. By providing your clients with planning services, you can help meet their needs and future-proof your business as well. 

Susan McAndrew, CPA, is a freelance writer based in Florida. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.