What I learned from my clients' tax returns
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What I learned from my clients' tax returns

3 years ago · 3 min read · AICPA Insights Blog

If you’re a CPA who has considered a move to financial planning, there are a few strong reasons why you as a tax practitioner are already best positioned to offer Personal Financial Planning (PFP) services. A little over a year ago, I achieved a lifelong dream when I opened my financial planning practice after 28 years as a CPA. Setting off on your own can be daunting, but I knew I was ready, in part because of my extensive tax background. Here’s how I knew:

Tax expertise is the foundation of personal financial planning.

As a tax practitioner, you already have most of the technical knowledge you need to offer PFP services. You also have a window into every aspect of your clients’ lives: the ups and downs of their careers or businesses, their savings, investment and retirement situations, and the impact of marriage and children. You already have all of that deep knowledge about their holistic situation, so you’re now taking that to the next level by looking holistically at their financial lives. As you consider making a change, check out this site, which offers free tools and resources to help you get started or take your practice to the next level.

Our professional standards inspire trust.

Whether they’ve been with me for decades or are new to my practice, my clients know that I provide objective and independent advice. Consumers want to work with advisers who are regulated and ethical. I can tell them that, as a CPA, I’m held to very high standards under the AICPA Code of Professional Conduct, Statements on Standards for Tax Services and the Statement on Standards in Personal Financial Planning Services. That’s a strong advantage in the marketplace over providers who aren’t CPAs. Plus, I know that I’m giving them the advice they need in the way they are wanting it.

Tax considerations are always a good starting point.

Let me give you an example. A couple recently asked me about the pros and cons of paying off a mortgage on a home or second home. I looked at the tax implications first, followed by the investment issues and any other relevant financial considerations. Finally, I reviewed the decision from an emotional standpoint, since I know my clients well and I’m aware that any financial move has the potential to make their lives easier or more complicated. I consider all of the information I’ve been given, but the analytical skills I rely on to assess the tax situation serve as my critical foundation.

You’ll be working with your best clients.

Some tax practitioners may worry that they don’t have enough time to shift to a new service area. I was successful by taking a methodical and measured approach and building on my existing practice. First, I identified high-quality tax clients who might be open to PFP. I met with them to discuss the services I could offer, emphasizing the benefits of helping clients manage their financial lives. Starting with that group, I built from there and ultimately launched my practice. I’ve developed stronger relationships with a smaller roster of great clients, and I’m having more fun and making more money. And if it makes starting the conversation easier, you can work towards the PFS credential. It will give clients confidence in your expertise in financial planning services and allow you to stand out from other CPAs and financial planners.

You can really focus on the value.

Beyond compliance work, I now help clients implement plans that will help them lower their tax bills and take steps that are important to them. I use an annual, renewable fixed-fee model that lets clients select from a menu of pricing choices. They get access to me and a clear scope of services. They can immediately see the value and recognize that they’re paying a fair price. I use two critical touchpoints during the year to review the value I have offered my clients—first, when I give them their tax returns, and second during yearend review meetings. At these times, I review what we’ve accomplished together, including tax and other savings and growth (e.g., tax-based investment strategies, estate planning suggestions, etc.). Approaching an engagement this way makes it easier to keep current clients engaged, helps clients communicate my value when making referrals, and makes it easier to convert my remaining tax-only clients to tax and planning clients.

Why didn’t I do this a long time ago?

That’s what I ask myself when I think about my PFP practice. From a base of tax services, you can add so much value for your clients by offering financial planning. I recommend joining the Personal Financial Planning Section to gain access to the tools and resources and ongoing support you need to take yourself and your practice to a future-proof model.

Begin today by taking proactive steps to discuss financial planning opportunities with your clients. You’ll be amazed at how far you can go!

Carolyn Larsen-Wieber, CPA/PFS

Carolyn has over 25 years of experience in advanced tax issues including estates, trusts, and gift tax which give her clients an advantage because every aspect of financial planning has some sort of tax implication. Carolyn recently started her own tax and financial planning firm, CLW Financial Planning LLC, with a vision to provide financial planning to clients as an educational experience to help them achieve their life goals. This vision includes providing a values-based, life centered approach. Carolyn received the Personal Financial Specialist (PFS) in 1999. This designation along with her CPA license and financial planning experience provided sufficient qualifications to allow her to provide an integrated planning experience to her clients. She is currently a member of the AICPA’s Personal Financial Specialist committee.

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