Strategic Expansion: Case Studies in Integrating Financial Planning Services for CPA Firms

Financial planners may not fully appreciate the value of a CPA firm’s client relationships if they suggest a simple one-to-one referral partnership.

This subtle yet impactful statement underscores a critical issue for CPA firms: the potential underestimation of their client base and service potential. As the financial services landscape evolves, CPA firms are uniquely positioned to expand into financial planning, unlocking significant revenue and client retention opportunities.

The Lucrative Potential of Financial Planning for CPA Firms

The financial planning sector presents an attractive avenue for CPA firms seeking growth. While traditional CPA firms typically sell at about 1x revenue, financial advisory practices command multiples of 2x revenue or higher. This stark difference highlights the untapped potential within CPA firms. Moreover, the operational dynamics of financial planning offer a more manageable workload compared to the seasonal intensity of tax work, allowing for a steadier stream of recurring income.

“The strongest partnership opportunity in financial services is between tax advisors and financial planners,” notes Geoff Bruskin, managing partner of White Tiger Connections. “The client is best served when the two work as part of the same team.”

Three Strategies for Integration

There are three primary strategies CPA firms can employ to integrate financial planning services, each with varying levels of commitment and complexity. Regardless of the strategy, consulting an attorney specializing in compliance is recommended due to complex legal and regulatory requirements.

1. CPA self-training and certification. The most demanding path involves the CPA personally acquiring the necessary financial planning expertise. This entails obtaining the Personal Financial Specialist (PFS) or Certified Financial Planner™ (CFP®) designation along with relevant licenses and starting, or joining, an existing Registered Investment Advisor (RIA) or broker/dealer. While this route requires significant time and effort, it allows for complete control over the new service offering. Ping Yin, CPA and owner of Yin Financial Service, LLC in Millburn, New Jersey, exemplifies this approach. She recently earned her CFP® designation in 2023 and has begun integrating financial planning into her practice, serving her clients with enhanced, holistic services.
2. Creating an RIA and hiring expertise. A more balanced approach is to establish an RIA and hire a qualified financial planner to manage it. This strategy allows the CPA to focus on their core competencies while leveraging the expertise of a financial planner. The CPA maintains ownership of the RIA, potentially sharing it with the hired planner who acts as the CEO of the RIA. Wiss & Company, LLP, a prominent CPA firm headquartered in Florham Park, New Jersey, successfully implemented this model by bringing on Stephanie Hughes five years ago as the CEO of Wiss Private Client Advisors, LLC. Under her leadership, the RIA has grown to more than $500 million in assets under management, primarily from their existing CPA clients, demon­strating the substantial growth potential of this strategy.
3. Forming strategic partnerships. The third approach involves partnering with an established financial planning firm. This model facilitates collaboration between the CPA and financial planner, offering clients enhanced services while providing the CPA firm with a share of the revenue. Anton Anderson, founder of Elite Resource Team, has been advocating this model since 2014. His newly released book, The Art of Collaboration: When 2 Tribes Stop the War, co-authored with an accountant, delves into the transformative potential of such partnerships. The team-based model they promote fosters a proactive, holistic approach to client service, breaking down traditional barriers and maximizing client value.

The Synergy of Ecosystem Mergers

Regardless of the path chosen, integrating financial planning services can create a syn­ergistic effect, where the combined value of the CPA and financial planner ecosystems exceed the sum of their parts. This concept of ecosystem merging is a cornerstone of Sean Callagy’s Unblinded Results Formula. As co-founder and chief visionary officer of Unblinded, Callagy emphasizes the expo­nential benefits of such integrations in the professions he consults, trains and coaches.

The integration of financial planning services not only enhances the value prop­osition for clients but also positions CPA firms for sustained growth and profitability. By expanding their service offerings, CPA firms can transition from reactive, compli­ance-based services to proactive, advisory roles, ensuring long-term client relationships and improved business outcomes.

The strategic expansion into financial planning is not just a business decision; it’s a transformative journey that can redefine the future of CPA firms.

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Justin W. Rice Justin Rice, CFP®, CSLP®, is a financial planner at Personal Wealth Strategies and serves as the president-elect of the Financial Planning Association (FPA) of New Jersey. More content by Justin W. Rice: Strategic Tax Filing Considerations for Married Student Loan Borrowers