Are you chasing the right solution?

• Author: Bernstein, Phyllis
• Position: Financial Services

Here's a bold idea in the face of an onslaught of accounting reform and attempts to limit what CPAs do: Our role as CPAs will expand. It must.

CPAs realize that they must reassess their traditional roles to meet clients' expectations and demands--including offering more comprehensive financial services. While this "brave new world" represents great challenges, it also holds the promise of great rewards.

STAYING OUT IN FRONT

Compelling market forces are pushing CPAs into financial services. To meet ever-increasing competitive challenges, CPAs must take advantage of new business opportunities.

Ken Koskay, CPA and director of business development at Practitioners Publishing Company, says that non-traditional competitors, such as brokers, banks, mutual funds and insurance companies, are making a "full-court press" to become their high-net-worth clients' most trusted advisers.

They are offering traditional accounting services and positioning themselves as full-service financial companies. "CPAs have the ability to remain the most trusted adviser," Koskay says, "but they must compete effectively to remain in front of the client."

STATUS CHECK

Just how prevelant is financial planning? More than 3,500 CPAs have earned the AICPA's Personal Financial Specialist designation; about 16 percent of the certified financial planners in this country are CPAs; and the AICPA estimates that about 85,000 CPAs are doing financial planning.

According to Karen Goodfriend, co-chair of CalCPA's Personal Financial Planning Committee, CalCPA's chapter and state PFP committees are growing. "Over the years," she says, "I have seen CPAs attend meetings who initially just had an interest in financial planning and now are practicing in that area."

Some chapter committees have grown dramatically, for example, Orange County/Long Beach Chapter's PFP Committee reports a 50 percent increase in meeting attendance over the past two years.

THE FACE OF CPA FINANCIAL ADVISERS

CPA firms are emerging as financial services firms in a number of ways. For example, more than 80 top accounting and financial planning firms recently formed a federally chartered trust company, National Advisors Trust. Members include both large and smaller firms and individual practitioners, some of whom paid an entry fee to be included in the trust.

Trust members have an ownership interest in the trust or co-trust fees associated with the trusts created for their clients. They continue to serve as adviser to...