Filling the Void

Aug 26th 2011
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By Al Prentice, vice president, strategic firm development,
1st Global

In a previous article, I described the tremendous vacuum that exists today in the financial services industry and how CPAs are uniquely positioned to fill that vacuum ethically and holistically. The financial services crisis of 2008-2009 resulted in the loss of more than a thousand financial advisors and dozens of traditional financial services firms, and it caused tremendous turmoil in the remaining survivors. The current market volatility we are experiencing will no doubt wash even more advisors out of the business. So here is the question: How do you fill that void given the many constraints facing the typical ensemble (multi-partner) CPA firm today?

CPA firms that desire to help their clients through this crisis find themselves facing six potential obstacles or impediments to success:

1.     Time: How can a CPA firm build a world-class wealth management organization when the partners are already working 40-80 hours or more per week?

2.     Expertise: Wealth management requires a very unique skill set where professional providers boast many specific designations and many years of focused experience.

3.     Capacity: Who in the firm has the desire, experience, education, skills and, yes, time to provide world-class service from day one?

4.     Sales Aversion: Most CPAs do not desire to be seen in a sales role, one that is imperative in the wealth management profession. Who will fill that role?

5.     Control: How many times have CPAs made recommendations for a client and sent them to an outside referral source only to find out later that a different (perhaps inappropriate?) solution was provided?

6.     Ownership: The true financial value for the CPA in this engagement is the enterprise value built over time. This value can be as much as two times the profitability of the ongoing business and four to six times the enterprise value of the CPA firm*. But in order to realize this value, the CPA must own the business, not refer it out.

Ensemble CPA firms can overcome these obstacles efficiently by employing a leveraged implementation model from a wealth management provider who employs proven systems and processes forged in the crucibles of modern CPA ensemble firms. A leveraged model is one that utilizes a proven experienced financial planner or wealth management professional who has the same ethical and cultural alignment as that of an ensemble CPA firm.

A proven wealth management model is one that allows a CPA firm to build an organization for solving virtually any client wealth management problem with a minimum of CPA time utilizing a full-time professional wealth management provider while building a business that delivers 40 percent to 60 percent** of the firm’s total revenue within five years. In addition, this business model strengthens client relationships in a non-commoditized business structure while building enterprise value that is four to six times greater than traditional services. This also provides a solution to the looming retirement crisis facing many firms today as they look for solutions to partner buyouts from younger firm members. 1st Global has helped many firms build million dollar plus wealth management businesses that provide solutions that efficiently and effectively overcome these six impediments.

For more information about offering wealth management services as a CPA firm and how strategic business partnerships with accomplished financial advisors can impact your growth plans, contact 1st Global at (800) 959-8461 or [email protected].

* Source: David Goad, Succession Planning Consultants Research.

** Data based on revenues of existing 1st Global affiliated firms as of June, 2011, including securities, insurance and investment advisory production. Results may not be representative of each advisor and/or partner within a given firm. Affiliate’s revenues will vary.

This article and its content has been provided by 1st Global. With more than 500 firms affiliated with 1st Global, it is one of the largest wealth management services partners for the tax, accounting and legal professions. 1st Global delivers the required capabilities essential for wealth management excellence including progressive ongoing education, which places the firm in a unique position to offer wealth management knowledge.
1st Global was founded by CPAs on the belief that accounting, tax and estate planning firms are uniquely qualified to provide comprehensive wealth management services to their clients. Each affiliated firm is provided with education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 8150 N. Central Expressway, Suite 500 in Dallas, Texas,(214) 265-1201. Additional information about 1st Global is available via the Internet at

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