Valuable Advice: You May Already Be Providing Personal Financial Planning.

• Author: Eisenberg, Michael
• Position: Client services

in today's world, tax return work has become more commoditized, which in turn creates fee pressure on tax preparation. As a way to help offset any loss of income, CPAs should start thinking about adding personal financial planning to their practices. Indeed, CPAs might already be providing these services, but aren't aware of it--and may not be getting compensated for this value-added service.

The Client Conversations Have Already Started

Take these scenarios:

* During a tax appointment with a client you discuss buying versus leasing a car, or if it makes sense for the client to keep renting versus buying a new house.

* How about that advice you gave a client about using some of the money they have in their bank account to help their cash flow and waiting to apply for Social Security until they are 70.

* A client comes to see you at tax time and brings you their year-end 1099 forms from their stockbroker. "Wow," you say, "There are big gains from stock sales." As you look over this statement you sec that there are stocks that show losses. You say to the client that it might have been better for them to sell those losses to offset some of the realized gains. This would be an opportunity to reposition the proceeds into other equities. While you're helping the client with some investment advice, you're doing financial planning with them.

* A client calls you and says they're having an off year as far as their annual income goes. You suggest maybe this would be a good time to convert some money from your traditional IRA to a ROTH IRA. Yes, this conversation is somewhat income tax related, but it also represents a longterm financial planning pointer.

* Your client comes to see you at tax time and informs you that their filing status will be different this year because they recently got married (or divorced). You suggest this client think about changing the beneficiary on their retirement account and life insurance policy. Guess what?

These are all financial planning discussions.

In all these examples you've helped a client with either an issue they had, or you have given them valuable information related to personal financial planning and it's possible you may not have billed them for this added value.

Embracing the Financial Planning Service

Once you realize you're comfortable with the fact that you're capable of assisting your clients with their tax returns and help them with their financial planning needs, you can let your clients know this is...