Seven PFP Strategies That Can't Wait
What are you doing to help worried clients? Tell us how CPAs should help. E-mail Rick Telberg.
December 1, 2008
by Rick Telberg/At Large
With an economy skittering out of control and investors facing once-in-a-generation losses, CPAs are talking increasingly about their special duty and capacity to help investors find calm in the storm.
I’ve been talking to dozens of CPAs and financial experts lately. But it doesn’t take long to gather at least seven essential take-aways:
1. CPAs are the voice of reason.
“We’re independent, objective and contrarian thinkers,” says Susan Bruno, CPA, PFS at Beacon Wealth Consulting LLC in Rowayton, Conn. “And isn’t that what’s needed today? I think that investors need that CPA perspective more than ever before.”
2. Do the math.
“The market is going to come back. But when? That’s the question,” Jim Shambo, CPA, PFS at Lifetime Planning Concepts Inc. in Colorado Springs, Colo. “Two years? Three years? Or five years? We don’t know and we can’t guess. We just need to do the math. And what that means today is looking at the loss in equities and sometimes seeing that it’s out of balance with your client’s other assets, like bonds, cash or even real estate. So it’s time to be rebalancing. With equities off so much it’s really important that we add some cash back into stocks. As a CPA, you have to follow the math and the math says rebalance.”
3. Let clients know you’ve prepared them well.
“We need to make sure that clients understand that bear markets have happened before and they’ll happen again,” says Lyle Benson, CPA, PFS at L.K. Benson & Co. in Baltimore. “These are the times we’ve been preparing for. That’s why, if you’ve been really following the financial process, you’re ready. You have a diversified portfolio that’s liquid in the right places to take advantage of some of the opportunities that are opening up here.”
4. Focus on the personal and specific.
The stock market averages may be down, but those are only averages, your clients’ needs are very personal and completely specific. CPAs need to be talking to clients about the details of their situations. For starters, Benson adds, tell clients to turn off CNBC TV and stop hitting the “refresh” button at Yahoo! Finance. “That’ll drive you crazy.”
5. Seize the opportunities.
“As bad as this is,” Benson continues, “and I really hate to put it this way, but it’s a marketing opportunity. This is a time when CPAs, who tend to be fiduciary type of advisors, can gather in clients and assets. We use a proven, well-thought-out process.” Ask Jimmy J. Williams, CPA, PFS at Jimmy J. Williams & Co. in McAlester, Okla. The market has been off about 40 percent, but his financial planning business is also up 40 percent. With a modest $52 million under management, Williams’ team of five is earning fees at a run-rate of $840,000 annually.
6. Keep it real.
Williams has something more to add: In reviewing goals and objectives with clients, CPAs have a knack for the No B.S. approach. “We know the facts. We stick to the facts. Clients want that and expect it from us,” he says. Unlike any other class of financial advisor, we can give our clients the information that they need to hear. And that gives it a credibility that others can’t give it. We keep it real.”
7. Start today.
With only days to go before year-end, CPAs need to move fast to help clients grab some last-minute opportunities. Robert Keebler, CPA/MST at Virchow Krause in Green Bay, Wisc., offers at least two quick ideas to put to work today:
Tax season starts in only a few weeks. But Dec. 31 is coming in a matter of days. Clients need their CPAs now more than ever.
JOIN THE CONVERSATION: What’s your view on the personal financial planning situation today? How worried are you? How worried are your clients? What should CPAs be doing? Tell me and I’ll post and share the best comments. E-mail Rick Telberg.
RELATED RESOURCES: Plan to attend the AICPA Advanced Personal Financial Planning Conference, Jan. 18 to Jan. 21 in San Diego, Calif. Learn more and register here.
Copyright © 2008 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
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