Welcome to AICPA Insights, the official blog for the American Institute of CPAs. AICPA Insights features posts from AICPA staff and accounting professionals on a variety of topics affecting the accounting profession, the AICPA and its members.
Entrepreneurism is on the rise. With start-up fever igniting the Bay Area to the Chesapeake Bay what CPA hasn’t considered—even for a moment—starting his or her own firm? We each started our own firms and know firsthand about the advantages and challenges of venturing out on our own. A few months ago we participated in a live Facebook chat on how to start your own practice. Many of you joined us and asked great questions such as: What prompted you to start your practice? What is the best way to get your name out there? What were some of the unexpected challenges you encountered?
What’s our advice? Here are seven tips for starting your own firm:
I’ve just returned from the World Congress of Accountants 2014 in Rome where the CGMA designation, powered by the AICPA and CIMA, served as the imperial and event app sponsor. I can tell you unequivocally, in English as well as Italian, that it was a great success!
WCOA is organized by the International Federation of Accountants and is held every four years. As lead sponsor, the event provided us the ultimate opportunity to showcase the CGMA designation, the US CPA credential, and the AICPA to an audience of nearly 4,000 professional accountants from around the globe.
At WCOA, we launched a series of reports and briefs that explore the latest trends shaping the future of business. Here’s a synopsis of those reports:
CPA financial planners and others who advise clients on healthcare and estate planning issues will want to know that the Medicare annual open enrollment period runs Oct. 15 through Dec. 7, 2014.
Many people understand they can switch from their 2014 standalone Part D prescription drug plan to a new standalone plan for 2015. Medicare beneficiaries can also drop their Part D coverage altogether, although this is not a good move unless you are moving from traditional Medicare to a Medicare Advantage plan with a prescription drug feature.
Medicare beneficiaries can also do the following:
1. Change from traditional Medicare to a Medicare Advantage plan.
2. Go from a Medicare Advantage plan to traditional Medicare, although the choices may be limited when it comes to finding a Medicare Supplement plan.
3. Transfer from their current Medicare Advantage plan to a new Medicare Advantage plan for 2015.
4. Move from a Medicare Advantage plan without prescription drug coverage to a plan that offers prescription drug coverage. Note that the Medicare beneficiary can also move from a Medicare Advantage plan that offers prescription drug coverage to one that does not.
In all of my dealings with employers on Affordable Care Act (ACA) matters since 2010, I’ve reached a few reasonably sound conclusions. Here’s one: employers are faking it! They are doing so when it comes to how IRS controlled group rules influence the ACA’s “Applicable Large Employer” (ALE) determination. It is this determination that serves as a foundational component of the ACA’s Employer Shared Responsibility (“pay or play”) mandate. To recap, employers of 50 or more full-time equivalent employees (100 or more for 2015) are expected to offer ACA compliant coverage (play) or pay assessable payments. The amounts of these payments are based on factors that include the number of full-time employees and how many of them qualify for Exchange-based premium subsidies.
Over the past three decades, a growing number of CPAs expanded their service offerings beyond tax compliance to help individuals and families address and plan for all aspects of their financial lives. These aspects might include paying for children’s education, transferring wealth, protecting assets, funding retirement and more.
As CPA financial planners help their clients realize their long-term goals, this expansion of service offerings opens up new revenue streams and deepens client relationships.
Earlier this year, as part of the AICPA’s PFP Section’s CPA Financial Planning Thought Leadership series, I moderated the webcast, “Being an Advisor of Choice.” Panelists shared their perspectives on working with individual and closely held business clients, the benefits of this expanded business model to the practitioner and firm and the outlook for maintaining this model. (See the note at the end of this blog post about how to download a recording of the webcast.)
During the webcast, we discussed a great deal of information. Here is a quick rundown of eight ways you can become your clients’ “advisor of choice.” How many of these are you already doing and how many would you like to accomplish?
1. Add Financial Planning to Your Practice
Tax compliance is becoming a commodity. Integrating financial planning into your practice offers a chance to make a deeper connection with clients, requiring you to give objective advice and keep clients’ best interests at the forefront.
2. Determine Your Value Proposition
When you add financial planning to your practice, you also add value, but you figure out what kind of value you want to add in order to grow your bottom line. The last thing you want to do is become just another firm offering the same services as everyone else.
3. Avoid Becoming a One Trick Pony Advisor
Clients are outgrowing the services of mono-line advisors. If you were simply a specialist in tax or investments, your clients will grow beyond your services.
4. Know Your Strengths
Position yourself as the advisor of choice. You have an excellent professional reputation, offer high quality professional advice and possess transferable skills that are diverse and applicable to various client situations.
5. It’s all About the Relationship
Deepen and enhance the relationships you have with existing clients who already understand your role as their advisor of choice. You may even need to reposition yourself with existing clients, particularly CFOs or controllers who retain you just for audit work or corporate compliance.
6. Listen to Your Clients
Competent advisors do their best work when they sit down with their clients to let them voice their concerns about the current financial world they live in. Listen for issues you can help understand and solve.
7. Build on Your Three Distinguishing Qualities
As a financial professional, you are competent and objective and maintain the highest integrity. Remember these qualities and seize the best opportunities you can.
8. Break the Mold
Advisors who are willing to address the wide range of issues that come into play and work with their clients and other specialists to serve their needs will be in a great position to be a strong, key resource.
AICPA PFP Section’s Thought Leadership Series
Access the free webcast recordings and presentation materials from the AICPA PFP Section’s Thought Leadership series featuring forward thinking from CPA financial planners advising their clients in tax, estate, retirement, risk management and investments. Two panels will host free thought leadership webcasts on November 12th and 13th covering investments and the outlook for the CPA financial planning profession.
Lyle Benson, CPA/PFS, CFP®, President and Founder, L.K. Benson & Company. Based in Baltimore, Lyle’s firm specializes in personal financial planning, tax and investment advisory services for high income individuals and families, as well as corporate executives and entrepreneurial, closely held business owners across the country. Lyle is chair of the AICPA’s PFP Executive Committee.