Overcoming Obstacles to Wealth Management

Mar 27th 2012
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By Tony Batman, chairman and CEO, 1st Global

There are many changes necessary to create and maintain a thriving, growing, profitable and premier wealth management firm. Defining the specific vision for your firm is the first step. But, once your firm formulates and articulates its vision, the firm leader must have the courage to make decisions and take action. While the action stage seems straightforward, there are many obstacles that you must overcome. These include learning a new set of rules, fearing failure at the firm level, shifting roles and responsibilities, adapting to constantly changing circumstances, getting “buy-in” from firm partners, and reinforcing your firm’s commitment.

Learning new rules

Why is change so difficult, in particular for CPA firms seeking to build wealth management practices? As CPAs, you are already successful professionals in terms of your technical competencies, client satisfaction, and financial results. Why should your firm do anything new or different? Also, the CPA mindset is forged in a very efficient, proscribed environment. You are trained to have 100 percent knowledge of tax laws, rules and regulations. You probably have 100 percent facility with the required forms and processes. The production of labor (tax returns) is organized around specific filing dates.

In short, as a CPA, you have broad technical knowledge, are fluent in navigating complex government forms and processes, and can expect clients to seek help to take action according to a government-mandated timetable. That efficient, organized mindset is drastically disrupted by a new set of rules governing a wealth management practice. Not only that, but there are no 100 percent solutions in wealth management. Therefore, your goal is not certitude; it is, rather, producing a tangible positive benefit to your clients’ financial lives, whether that benefit is immediate to clients, or deferred for parties dependent on clients.

Fearing failure at the firm level

Your firm may also have an inherent resistance to climb on board the wealth management wagon due to a healthy dose of fear: fear of failure. The venture into wealth management could turn out poorly, threatening the reputation and the image of your accounting and tax practice. The partner who champions wealth management also carries the risk of bearing personal responsibility for the success or failure of your wealth management enterprise.

Shifting roles and responsibilities

Your firm must not only overcome these psychological and motivational issues, you must also navigate the firm through “external” changes. Your firm often must make changes to personnel, reassigning and redefining roles, responsibilities and the processes by which staff work together. To accommodate the action steps required to drive your wealth management practice, the daily routine of every partner may have to change.

Building a growing wealth management practice requires making changes to the status quo, changes in staffing, changes in systems, and changes in everyday thinking and activity.

Adapting to constantly changing circumstances

Change is not a one-time phenomenon. Your firm must recognize and capitalize on change in circumstances and opportunities. If you want to succeed, you must adapt to a constantly changing set of circumstances. You need to recognize the need for change, expect it, embrace it, and lead it. You must be more than a “systems manager.” You must lead people as well. One of the chief obstacles to growing a world-class wealth management practice is the failure to get every CPA firm partner on board.

Getting “buy-in” from firm partners

In any CPA firm, large or small, chances are that not all partners are prepared to make what they perceive as a “leap of faith” and seek to build a world-class wealth management practice. How you overcome these obstacles and engender genuine “buy-in” by firm partners marks a true leader.

Recruiting or converting partners to the wealth management “cause” requires a pattern of targeted communication−each communication initiative focusing on a different objective.

The first step as wealth management champion is to make others aware of your vision. That vision includes both self-interest and an interest in benefiting others in the firm. Passion comes from these dual motivators: the urge to reach higher on a personal level, and the urge to build a shared identity through the firm and its collective members.

How to Overcome these Obstacles

Three Reasons Why Wealth Management is a Concern for CPA Partners:

  1. The competition is keenly focused on wealth management;
  2. Wealth management offers a service that retains existing clients and recruits new clients;
  3. Wealth management can create real EBITDA and continuous cash flow, allowing for effective succession planning as partners contemplate retirement and seek an exit strategy.

It is imperative that your firm partners gain a full and deep understanding of your vision in a collective environment. A roundtable discussion serves as an effective forum for both sharing the wealth management vision and allowing partners the opportunity to question, probe, doubt, and explore the “new mindset.” Many firms invite a consultant or resource partner to attend, contribute, and, often, facilitate this firm-wide forum. The outside party, someone who works with similar firms, lends perspective to the discussion and can focus your partners on the key issues and ways other firms address them.

One objective in the communication process is to create an air of real concern. From a firm’s business perspective, and long-term outlook, it should be a concern if the CPAs do not have a successful wealth management practice. Why should it be a concern for partners? Three reasons:

1.       The competition is keenly focused on wealth management.

2.       Wealth management offers a service that retains existing clients and recruits new clients.

3.       Wealth management can create real earnings before interest, taxes, depreciation and amortization (EBITDA) and continuous cash flow, allowing for effective succession planning as partners contemplate retirement and seek an exit strategy.

The next objective is to help your partners recognize and express their dissatisfaction with the status quo. Once they are aware of the vital role wealth management can play for your firm, and for their personal futures, they should acknowledge dissatisfaction with the current state of wealth management.

The watershed moment comes when reluctant partners show a desire and a willingness to act. At this point, the action plan serves as the blueprint to guide each partner. Once a plan is implemented to effect change in the behavior of individuals, there will be a hunger for feedback, for improvement, for results. Change with a purpose: to drive your firm’s success.

Reinforcing your firm’s commitment

Communication is a vital function for your firm’s success. Many professional services firms operate as an agglomeration of individual silos, each partner focused solely on his own clients. To open up these silos to the benefit of collective action, a communication plan is essential. The best means of getting the message out about wealth management initiatives is through regularly scheduled meetings. It is not enough to include wealth management as an item on a broader firm meeting agenda.

Meetings raise awareness of wealth management activities, but they also reinforce the commitment and transmit the energy of those partners and staff who are thriving in your wealth management business unit. Successful firms discuss goals at every meeting, both setting goals and tracking progress toward the achievement of those goals. While it is important for your firm to define success along with long-term goals, it is essential to also set periodic, realistic, attainable goals. These goals should both be results-oriented (like revenues, new clients, etc.) and activities-oriented (number of client contacts, meetings, educational programs attended, etc.). Monthly goals are your firm’s guideposts to measure progress toward the long-term goal of success.

Short-term/periodic/monthly goals also provide an opportunity for frequent review, allowing for fine-tuning to improve results, and are also a chance to celebrate small successes. As the Chinese proverb wisely says, “Even the journey of a thousand miles begins with a single step.” These celebrations, if they reflect your firm’s (and the individual partners') definition of success, can drive partner buy-in.

Celebrate when clients say “thank you” for the wealth management services your firm provides. Celebrate an advanced solution that required a high-level professional approach. Celebrate the number of new wealth management clients. Celebrate the record revenues attained over a given time period. Celebrate the advanced professionalism of individuals through education programs. Celebrate your firm’s recognition in the community or the industry. The bottom line: success is contagious. By communicating success to every firm partner and staff, your firm can recruit/contract more help for the wealth management “cause” and overcome any obstacles to providing wealth management at your firm.

This article and its content have been provided by 1st Global. With more than 450 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 75206 (214) 265-1201. Additional information about 1st Global is available via the Internet at

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