The Segue from Tax Preparation to Financial Planning

Source: Accounting Today

Because so many financial investment decisions have tax ramifications, it is natural for CPAs to provide financial planning advice. For example, you may advise a client to increase his 401(k) contribution. That may provoke a question about how to invest the additional money. However, many CPAs may stop short of specific stock recommendations.

CPAs are not only the most trusted advisor, but they also have the best understanding of the configuration of clients’ financial setup.

Some firms view tax preparation as something they do, not as an end in itself, but as a means to obtaining financial planning work.

For high net worth clients it makes sense to create a team including an accountant, attorney, financial advisor, and insurance agent. The CPA is often the best person to direct the team.

Some CPAs don’t consider their work with clients’ investments to be financial planning. They view it as working with, and perhaps leading, other professionals in providing the best possible service to clients.

For the complete article, click here and select From Preparing to Planning from the January 7, 2008, issue.

From Accounting Today, January 7, 2008, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.

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