Can Financial Planning Services Double a CPA's Income?

By Ken Huffman, CPA, CPA to CPA, Inc.  – July 5, 2022
Can Financial Planning Services Double a CPA

Not only is it possible for CPAs to double their income by offering financial planning services, more CPAs than ever are imple­menting this client service to do exactly that.

The accounting profession is a great one to be in. Surveys have shown that clients trust their CPA even more than their financial advisor. Surveys have also shown that clients would rather obtain financial products from their CPA than a financial planner because CPAs are trusted advisors. BUT…who has time to do all of that? It’s hard enough for many CPAs to keep up with their existing business much less dip their toe into a whole new service line.

The Options

Fortunately, there are several ways to get the benefits of offering financial planning services without wearing oneself out. Here are some options:

  • Get licensed to offer financial planning products (securities and/or life insurance).
  • Outsource all the financial planning.
  • Implement a hybrid model where a financial planner works with the firm but is not directly employed by the firm.
  • Work with CPA firm specialists that will help implement financial planning strategies into the firm. This is a turnkey approach where the financial planning personnel can be provided or the CPAs can be trained to do it themselves.

Each of these options can result in additional income for the firm.

Some CPAs hesitate to offer financial planning because they don’t want to “sell products.” However, when it comes to financial planning services, CPAs do not have to “sell” anything in order to success­fully implement financial services into their firm. CPAs will simply lay out options for their clients, similar to suggesting tax strategies. The client then decides what they would like to do. The CPA can decide the types of financial planning services he or she feels comfortable offering.

Is It Worth It?

Is the extra money the firm will receive worth all of the effort? Absolutely! I talk with fellow CPAs all the time who have implemented financial services into their practices, and the firms are very profitable. Having a second stream of revenue helps keep the bottom line healthy and the firm’s market value high. Additionally, it allows the firm to create a stream of residual income. Residual income is something most CPA firms rarely get to participate in, unless they add financial services into their practices.

Licensing Requirements

Does a CPA have to get additional licenses to offer financial planning services? Usually, but not necessarily. It depends on how the firm structures the financial services business. However, if a CPA does have to get licensed, it’s not something that should be feared. If you passed the CPA Exam, you can pass any financial planning license exam. I’ve obtained my Series 7, Series 66 and life insurance licenses, and none have come close to the difficulty of the CPA Exam.

Now is a great time to look into the options. CPAs who implement financial planning services are more profitable and increase their firm’s market value.

Ken Huffman

Ken Huffman, CPA, is the president of CPA to CPA, Inc. and founder of Captive Nation.

This article appeared in the Summer 2022 issue of New Jersey CPA magazine. Read the full issue.