6 Planning Ideas for CPAs Who Have Aging Clients
You might have noticed the “graying” of your clients and thought “how can I, as a CPA and trusted adviser, provide services that meet their changing needs? What are the practice considerations surrounding those services?”
Recently, we served on a panel at the AICPA Conference on Tax Strategies for the High-Income Individual that focused specifically on these issues. Consider some of the following ideas gleaned from the session and how you may be able to incorporate them into your practice:
- Services: Cognitive challenges often affect executive functioning, such as the ability to handle day-to-day finances. Services you might offer include automating finances such as bill paying, monitoring investments, and reviewing banking records to identify elder financial abuse. With clients more commonly living into their 90s and beyond, budgeting and the recurring financial responsibilities of an individual or family take on a very different nature.
- Billing: Consideration must be given to how practitioners will bill for these services, not only upon inception, but also as the clients age. Commonly, service needs increase due to deteriorating health. If services are priced on a fixed-fee basis, what happens if the client develops Alzheimer’s disease or another type of dementia and the scope of services expands? While practitioners are often familiar with billing for accounting and tax compliance work on an hourly basis, some of the work for aging clients will be different and will require different billing alternatives.
- Next Gen: Expanded services to aging clients can help CPAs grow their practices by reaching the children or other heirs of aging clients. The children or others who are named as agents under aging clients’ durable powers of attorney, or as successor trustees under clients’ revocable trusts, are the ideal people to contact. Reaching out to clients to arrange meetings with their designated fiduciaries is a logical value-added step, often minimizing the risks of problems when the baton is passed.
- Reality of Family: Many planners presume that every client has an array of trusted family members to serve in various fiduciary capacities, such as serving as an agent under a durable power of attorney to handle finances when the client is incapacitated. Practitioners should have open discussions with clients as to whom they have named in these capacities and whether the people they named are really appropriate.
- Marketing: Marketing a new array of services for aging clients will require educating potential clients about the benefits of having a CPA more involved in their financial affairs. Also, this type of educational marketing should focus on building comfort and peace of mind for the target audience. Older advisers who may have long-term relationships with older clients are in an ideal position to market their firm services to those aging clients. In addition, older, and in particular, retired partners may be ideal candidates for clients to name in fiduciary capacities as co-trustees or trust protectors.
- Collaboration: Myriad issues facing aging clients requires the collaboration of all consulting professionals. Not only is planning for aging a multi-disciplinary task, but clients often tell different parts of their story to different advisers. Collaboration can help put the disparate pieces of the client’s puzzle together.
Many CPAs may believe that developing the expertise, forms, procedures, engagement letters and other steps to serve an aging market will not be profitable. There is no doubt that there will be upfront investment costs in time and training. However, this truly presents an opportunity for CPAs and CPA financial planners to help aging clients with significant life-long decisions. The AICPA PFP Division has a number of resources which provide guidance on these issues, including its Elder Planning and Life Transitions after Retirement webpage, as well as a webcast recording on New Services to Offer Aging Clients.
Martin Finn, CPA, L.L.M., Lavelle & Finn, LLP. Martin counsels clients on estate, financial, tax, business and elder law issues, including personal and corporate tax planning, business counseling, structuring of business transactions, estate administration and estate and business succession planning.
Ted Sarenski, CPA/PFS, Blue Ocean Strategic Capital, LLC. Ted is chief executive officer and president of Blue Ocean Strategic Capital, LLC, in Syracuse, New York. He is a frequent presenter on webcasts and at conferences, and recently authored the newly updated CPA’s Guide to Social Security Planning for the AICPA’s Personal Financial Planning Section.
Martin Shenkman, CPA, MBA, PFS, AEP, JD, Shenkman Law. Martin is the founder of Shenkman Law, where he focuses on estate and tax planning. He is the author of more than 42 books and 1,000 articles, and is a quoted expert on tax matters. His work appears in well-known publications, including The Wall Street Journal and The New York Times. See his blog posts at www.shenkmanlaw.com.
Aging clients courtesy of Shutterstock.