Rick Telberg
Rick Telberg

Three Things Every Client Needs Today

And the four misconceptions holding CPAs back. READER SOUND-OFF: What can CPAs do in “the Great Recession?” E-mail comments to Rick.

January 20, 2009
by Rick Telberg/At Large

With tax season approaching, CPAs face a rare opportunity for valuable face-time with clients who may be feeling unsettled — if not completely up-ended — by the sputtering economy and stock-market crash.

Never in memory have clients needed accountants more. Clearly, we are in the middle of the worst recession in decades. It’s not your father’s Great Depression, but it’s as close as we’ve ever come. At Rochdale Investment Management, which partners with CPA firms to deliver financial services, they are calling it “the Great Recession.”

The question is: What can CPAs do about it? The answer, from Rochdale CEO Garrett D’Alessandro, is: Plenty.

D’Alessandro, a scheduled speaker at this week’s AICPA Advanced Personal Financial Planning Conference in San Diego, recommends three steps every CPA with investment clients needs to take today:

Action Step 1: CPAs should be urging clients that their remaining holdings be re-examined. Are the companies still good investments? Have ratings on their bonds held up? Even if the CPA doesn’t have the credentials to handle the review himself, the client needs to get it done.

Action Step 2: CPAs need to have a heart-to-heart discussion with clients to re-calibrate their risk tolerance in light of “the new realization of the declines in each client’s investment wealth,” according to D’Alessandro.

Action Step 3: CPAs need to review the time horizon and the cash-flow needs that each client expects to take from the portfolio. Then their portfolios need to be revised to reflect the new uncertainty of this new economic phase. Each client should be presented with three scenarios: a low risk, a moderate and a growth scenario, so they can see which best fits their goals and needs given the new high-volatility environment.

“I fundamentally believe that CPAs have a wide open opportunity to bring their accounting and business experience into a combined service for clients,” D’Alessandro says. Many clients want and need to have a portfolio management service integrated with their tax, estate and other financial-planning needs.

“The trend is clearly in the CPA’s favor,” he says. “As more clients understand that CPAs can provide this type of service, the early adopters will win new clients seeking one-source client relationship management.”

To seize these new opportunities in personal financial services, D’Alessandro says “CPAs should partner up, rather than try to develop investment management services in-house.” To be sure, Rochdale’s business model for CPAs isn’t the only one. And, having chosen to partner with a money manager, Rochdale is one of several firms in the field.

Still, too many CPAs suffer under misconceptions that prevent them from jumping into personal financial planning (PFP).

Misconception 1: CPAs are unnecessarily worried that they will be held responsible for the investment manager’s performance, thus jeopardizing a client relationship.

D’Alessandro counters simply, “I have been doing this for 22 years and I have not had a single experience where the client held the CPA responsible for the money manager’s performance.”

Misconception 2: CPAs believe they need to become an investment expert to deliver money management services.

“The client knows full well the role and responsibility of the CPA and of the money manager,” D’Alessandro says. “The CPA should never resist entering into the financial planning and advisory business because they feel they don’t have the specific technical skills.”

Misconception 3: CPAs fret they won’t have enough time to build the business.

“The money manager handles all aspects including reporting, client meeting preparation,” according to D’Alessandro.


Misconception 4: CPAs may feel less than fully competitive providing services outside their training and comfort zone.

But, D’Alessandro says “Being in the business of working with a client to assist them with their money management needs requires only that the client like and trust the CPA and that the CPA has good listening skills.”

So the question remains: Why, so many years into the evolution of the CPA profession, have so few accountants jumped into the financial planning business? After all, CPAs are at the core of a client’s financial life and a natural fit.

CPAs will say they’re busy enough with their regular business, and they just don’t have the time. But the same firms also complain that they feel competitively out-paced by other firms.

To thrive, CPAs and their firms need to reinvest some portion of their time and assets into developing new and additional services for clients.

But then, the biggest lesson from this recession may be all about smart investing. Can you think of a better investment than yourself?

READER SOUND-OFF: What can CPAs do for clients in “the Great Recession?” E-mail Rick Telberg with your rants, raves, ideas, questions or idle comments.

Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.

About Rick Telberg

Rick Telberg is editor at large/director of online content.

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Disclaimer: Any views expressed in this article do not necessarily reflect the views of the AICPA or CPA2Biz. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.