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The Firm of the Future: Building Value by Evolving

Firm of the futureWhen starting an accounting practice, it’s important to think about the long-term value of the firm. True forward thinkers might even ponder what their end game looks like; is their goal to merge with another firm or sell their firm? To be succeeded by a partner or family member? In real-world terms, that means thinking about inventive and even unconventional opportunities to expand services beyond the realm of tax preparation, auditing and advice with the goal of appealing to the broadest possible client base. In a world where insurance companies, stock brokers, banks and even franchises like H&R Block are expanding client services to include planning for retirement, education or even simply, how to manage cash flow to maximize financial security, no firm can afford to neglect these areas of their clients’ lives. Competition is becoming too intense.

This integration of broader services provides growth for the firm. By offering clients help with retirement and estate planning, CPAs can become indispensable advisers. The scope of offerings to prospective and existing clients results in much stronger client relationships. CPAs are uniquely positioned to address tax preparation and cash flow as they relate to the planning needs and financial health of clients. Expanding services creates opportunities to increase the value of their firms—and thus their saleable value.

Another reason to incorporate more personal financial planning services is to broaden the scope of CPAs’ professional networks. While helping clients review all aspects of their financial life, CPAs will naturally find themselves working with insurance specialists and law professionals, among others. Firms therefore, will begin to be seen as the single, go-to source to meet their client’s financial needs, making them far more competitive in a marketplace.

At its heart, integration of services is all about rising to the needs of a rapidly changing financial services marketplace. The numbers don’t lie: According to an IBIS World 2015 study, personal financial planning is projected to grow two times faster than traditional accounting services in the coming years. The growth potential for financial advisers is driven by the reality that 10,000 Baby Boomers a day are estimated to turn 65 over the next 10 years (Pew Research). In fact, The Bureau of Labor Statistics projects a 27% growth in the need for personal financial advisers over the very same period.

Perhaps what’s most significant is the way this shift can enhance the value of both firms AND the quality of adviser-client relationships, contributing to more financial security for CPAs and clients. If firms are to keep pace with financial services marketplace evolving demands, CPAs will need to find innovative ways to incorporate this natural progression of client needs into their traditional accounting practice. Not only will a firm be much better poised to serve all their clients’ needs in a more holistic way, but owners and partners can be sure their firms remain competitive while presenting a more attractive investment for future purchasers.

Read more about incorporating personal financial planning alongside traditional accounting services, and learn how to integrate PFP in your practice by visiting AICPA’s Personal Financial Planning section, and this page of free resources and tools to help you get started.

Stuart Kessler, CPA, PFS, Director at CohnReznick. Stuart is also a past chairman of the AICPA Board of Directors, and past president and member of the NYSSCPA Hall of Fame, as well as chair of the ISO’s technical committee, which set international standards for personal financial planning.

Future courtesy of Shutterstock.

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