Breaking into Personal Financial Planning: How CPAs Can Get in the Game. Presented By: Caleb Brown, MBA, CFP and Janet Davis, CPA, CFP

Transcription

1 Breaking into Personal Financial Planning: How CPAs Can Get in the Game Presented By: Caleb Brown, MBA, CFP and Janet Davis, CPA, CFP

2 Introduction Caleb Brown, MBA, CFP Partner, New Planner Recruiting, LLC Janet Davis, CPA, CFP President, Trusted Advisors Consulting 2

3 Agenda What is financial planning/what it means to do financial planning How to diversify away from tax and auditing exclusively How to pave your own unique career path as a CPA How to find a firm with a successful PFP practice and join it 3

4 Financial Planning Industry Overview Born out of the securities and insurance industry in the mid 70 s Shift from a once-n-done type relationship to an on-going relationship Emphasized continuous advice Developing a document (plan) as a framework for decision making Multidisciplinary in theory Regulated by Securities Exchange Act 1934 and Investment Advisers Act

5 Business Opportunities Endless! You are already the trusted advisor in most cases CPA credential Familiar with tax strategies and tax law Impacts all areas of PFP advice Know the client situation Tax returns Diversify your client base and revenue streams 5

6 Service offerings Typical accounting firm: Audit/Tax/Consulting Typical PFP firm: Insurance planning Retirement planning Employee benefits planning Investments planning Estate planning Mortgage planning Tax planning Business planning Stock option planning 6

7 How much money can I make? It depends! BLS: FP and Accountant/Auditor Occupation (SOC code) Employment(1) Hourly mean wage Annual mean wage(2) Accountants and Auditors(132011) ,430 Personal Financial Advisors(132052) ,180 Typical firm compensation structures Commission Fee Based (Commission and fees) Fee-only AUM, Hourly, Project, Retainer 7

8 Personal Financial Planning in a CPA Firm Natural extension of service for tax clients Many clients look to their CPA as their most trusted advisor Clients may already ask you financial planning questions. Fills schedule during the slow summer/late fall period Creates value for clients and generates additional revenue for the firm 8

9 Personal Financial Planning in a CPA Firm Personal Financial Planning is a year round process This makes busy season busier. Personal Financial Planning is more than just numbers There are many disciplines of financial planning not covered by the CPA exam or most (common) CPA continuing education courses Insurance, investments and the planning process. Your peers and supervisors may not fully understand what you do 9

10 Personal Financial Planning in a CPA Firm Find a mentor Broaden your knowledge base Get experience 10

11 Career Path Options 11

12 Creating Your Own Career Path Unlike public accounting firms, personal financial planning firms come in all shapes, sizes, and areas of specialization Attend local AICPA PFP chapter meetings to meet financial professionals and get a different perspective Determine where your strengths lie and the work you really want to do Find the firm that most closely matches your goals or Create your own firm to fulfill your vision 12

13 Career Tracks Emerging CPA Joining Existing Firm Emerging CPA Starting Own Firm Emerging CPA Hybrid Option 13

14 Which One is Right for Me? Things to consider Personality type Strengths & abilities What do you want to be doing (i.e. career & personal goals) Financial situation 14

15 Emerging CPA Joining Existing Firm Working for someone else Duties, experience gained, and benefits can vary drastically Indy Fee-only RIA most popular, Indy RIA with B/D affiliation 2nd Can be tough to move up the career ladder remember these are small firms! Network, network, network local CPA societies, AICPA conferences/events, alumni, etc. Most popular path for younger entrants 15

16 These Days Everyone s a Financial Planner 16

17 Questions to ask to help find the right fit What is your business model? How do you generate your money/revenue? What type of client deliverables do you provide? Describe the culture of the firm for me What are the most difficult aspects of the position? Why do you want someone for this job? Am I required to bring in clients for this position? How do you think I'd fit into the job and into your organization? 17

18 Emerging CPA Hybrid Entry Path Working for someone else as well as building your own business Usually lower guaranteed income Client acquisition Usually Registered Rep. or RIA with B/D affiliation Difficult 18

19 Emerging CPA Starting Own Firm Work for yourself a.k.a hanging the shingle! Client issues Business Management issues Usually Registered Rep. or RIA with B/D affiliation Very difficult 19

20 Securities Licensing FINRA Series 6 Variable contracts FINRA Series 7 General Securities Rep. NASAA Series 63 Securities Agent State Law NASAA Series 65 Investment Adviser Law (IAR) NASAA Series 66 Uniform Combined North American Securities Administrators Association 20

21 Professional Designations Alphabet soup! CPA, PFS, CFP, CFA, AFC, CLTC, CDFA, ATA, ATP, CEA, CEBS, CAM, MFP, CWM, CTEP, CPM, CFC, CRC, CIMA, RFA, CFS, CHFC, CIMC, CLU, CPM, CRPC, CRPS, CTFA, EA, ELS, LUTCF, REBC, RFP, CSA, CCPS, CAA, CEP, CASL, CIC, CAIA, ECS, FSPA, GBA, CPC, CTS

22 Keys to success as a Personal Financial Planner Strict attention to detail Excellent written & verbal communication Highly organized Self starter & high sense of follow through Multi-task & be able to deal with stress Work independently, but mesh with small team Professional awareness and anticipation of client needs and questions Quest for knowledge Get your CPA/PFS and/or CFP certification! 22

23 What does the future hold for PFP? Continued fee compression Uncertain regulation and oversight Working with Gen X & Y clientele Developed career track 23

24 Takeaways Lots of opportunities Focus on skills/personality Utilize resources/mentors Can t stop learning Can find the right fit if you put the effort in 24

25 Resources Websites cpa2biz.com/pfp, Books E-Myth Revisited Michael Gerber So You Want to Be a Financial Planner Nancy L. Jones, CFP Deena Katz on Practice Management Deena Katz, CFP Practice Made Perfect Tibergian & Pomering Papers/Articles Misaligned Expectations Dave Drucker, 2009 Strategic Personal Career Planning: An Entry Point for Students in Financial Planning Michael Anderson, CFP Don t Get Passed Up The 10 mistakes new financial planning grads should avoid when Launching their Career Caleb Brown, CFP Blazing Financial Planning s Career Paths Jonathan Guyton, CFP The Great Divide Angie Herbers,

26 Questions? Janet Davis, CPA, CFP President, Trusted Advisors Consulting Caleb Brown, MBA, CFP Partner, New Planner Recruiting, LLC 26

27 Resources Additional materials (aicpa.org/pfp) Roadmap to Developing and Managing a CPA Personal Financial Planning Practice Checklist: Analysis of a Tax Return for Personal Financial Planning PFP Practice Center (aicpa.org/pfp/practicecenter) Forefield Advisor (aicpa.org/pfp/forefield) Upcoming Web Seminars (aicpa.org/pfp) Series: From Tax Preparer to Financial Planner: The Road Best Traveled - Part 1: The 1040 Diagnostician: Tax & Financial Planning for Individuals (May 3 rd, 1:00-2:30 p.m. ET) - Part 2: Expand Your Financial Planning Practice through Your Client s Tax Return (May 18 th, 1:30-3:00 p.m. ET) - Part 3: Formalize Personal Financial Planning Services: Stories from Successful CPAs (June 8 th, 1:30-3:00 p.m. ET) The Top 15 Estate Planning Ideas that CPA Financial Planners Should Consider Now (May 20 th, 1:30-3:00 p.m. ET) For the full calendar, visit aicpa.org/pfp and click on CPE & Events P. Thomas Austin PFP Division Scholarship to the AICPA Advanced Estate Planning Conference For emerging CPAs apply by May 31 st! PFS Program (aicpa.org/pfp/pfs) PFS exam review course now available on CPA2Biz PFS exam registration now open! Learn more & register at aicpa.org/pfsexam (exam window June 20 through July 29, 2011) PFS in-depth education available $400 sponsorships offered to PFP Section members PFP homepage: aicpa.org/pfp 27