Building on compliance: the evolution of tax services.

• Author: Fohn, Dick

Job security is a beautiful thing. Since the establishment of the earliest known governments, taxes have been imposed on the populace to enable government spending--they are not going anywhere. Today's tax complexity ensures a place at the table for CPAs. A recent study showed that 95% of tax filers understand a CPA's tax qualifications, but those filers also understand that CPAs are not the only game in town.

Despite this, the news is good for CPAs: Members of the public also recognize a CPA's role as a trusted adviser for all their financial needs and are increasingly looking to consolidate those needs with a single service provider. This is a golden opportunity for individual CPAs and their firms, not only to expand their services to their clients, but also to keep the compliance services they might have seen diminishing over the past decade or more.

Growth of Integrated Services

This past October, the author addressed the AICPA Council about consumers' need for high-quality integrated services. The need is real. Baby Boomers are retiring at a rate of 10,000 per day, and the nation will soon witness the largest transfer of generational wealth in history--an estimated $15 trillion in bequests over the next 20 years. Millions of Americans need retirement guidance. Millions more are inheriting wealth. Where do they go for help? CPAs have been doing this for over 100 years; it is not new to them. What is new, however, is a change in the core strategy of how CPAs have approached integrated services.

Integrated services include various services CPAs can provide to individuals: tax compliance and planning, risk management, investments, charitable planning, retirement planning, and estate planning. "Integrated" refers to the interrelatedness of these services. Investing is often part of retirement and education planning, for example. Estate and charitable planning frequently coincide. Tax is an undercurrent in all of it. For now, CPAs' clients might be going to two or more places to get these services, but trends suggest that it will not be that way for long.

In the author's experience, what individuals want today is a comprehensive group of services and a comprehensive relationship with their CPA. It is deeper than just getting the return prepared; clients want a one-stop shop where all their financial needs can be met. What does this mean? Consider the following.

The health care industry is making this same transition. Several health provider organizations have adopted a business model where general practitioners are supplemented by specialists--often in the same building--who can provide same-day or nearly same-day care for any issues discovered during the initial consultation. In this system, patients do not have to wait days or weeks to see results. It all occurs in one place, under one banner. That is a powerful value proposition. Consumers are all looking for one-stop shopping to give them more time for the rest of life.

CPAs might not be accustomed to thinking about their services in this...