From the December 2004 issue of Investment Advisor • Subscribe!

Maybe This Time for CPAs?

Ask most comprehensive advisors whether they believe that accountants will be a force in financial planning and most will pooh-pooh the notion, citing CPAs' "cultural" challenges--they're beancounters, after all, who can't see the financial forest for the trees. Others might question whether an accountant could ever actually sell something. But there's no doubt that accountants are a formidable presence by the sheer weight of their numbers alone: There are 340,000 members of the American Institute of Certified Public Accountants, and AICPA's Personal Financial Planning division says there are 80,000 CPAs doing some financial planning.

One of the reasons CPAs have not had an impact commensurate with their numbers in planning is that too many have seen it as a way to add incremental income to their CPA practices, says Mark Tibergien, who as a consultant with Moss Adams of Seattle has studied and advised many accounting firms. Too many accountants are "dabblers" in the wealth management arena, which Tibergien says hardly makes it worth the risk. "There's nothing inherent in accounting education that prepares you to be a wealth manager," he argues. There are some accountants, however, who Tibergien calls early adapters. They are "willing to take risks, recognize the value in how they deliver wealth management to their clients, and don't look at it as a product sale, but as a valuable service that carries some weight."

Tibergien could have been describing the folks at BAM Advisor Services, a back-office solutions provider for CPA firms looking to get into financial planning and wealth management. An affiliate of the RIA Buckingham Asset Management in St. Louis, BAM Advisor Services has 108 affiliated firms in 44 states that have $2.7 billion under management. These fee-only advisors, many CPAs themselves, are true believers in the asset class-index-like funds approach preached by Dimensional Fund Advisors; in fact, BAM is DFA's largest single client. BAM has special relationships as well with Schwab Institutional and Fidelity. These member firms are anything but dabblers in the wealth management arena. Stuart Zimmerman, a principal and founder of Buckingham and BAM, said most of the firms in BAM Advisor Services are looking to double their assets under management over the next year.

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