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CPAs continue to be the most trusted advisors of small business owners, according to a survey by InterPay, a payroll company in Mansfield, Mass.

After CPAs, the most trusted advisors are business friends, then attorneys and lastly bankers, says Curt Raffi, InterPay spokesman. “CPAs are still controlling most of the movement of advice in the small business market.”

The survey also indicates there is a general dearth of insurance and benefits-related data reaching the small business field.

InterPay asked its clients four questions ranging from the benefits they feel compelled to offer employees, to who is their most trusted business advisor.

Thirty-one percent said business has increased 1%-5% compared with last year; 58% identified their CPA as their most trusted business advisor; 70% said offering healthcare is necessary in the hiring process; 70% do not offer pre-taxed plans (Section 125 & Flexible Spending Accounts) for their employees.

Many small business owners are eligible to offer pre-tax flexible spending plans but are not aware of it, Raffi says.

“Theres a lot of insurance-related data not getting down to them,” he says. “There are tax strategies and benefit-related offerings small businesses are not aware of, theres a huge information-sharing need at that level.”

But the survey results are in direct contrast to the experience of Rick Patterson, a chartered financial consultant and National Association of Insurance and Financial Advisors Trustee. Almost 100% of his clients are small business owners. “If I met an advisor who is not in the (small business) market Id be shocked,” he says.

Patterson agrees CPAs are highly trusted by their clients, but they should be considered part of a team that includes a financial advisor, banker, trust officer and attorney.

In most cases, a small business owner would consider his CPA his most trusted advisor regarding impact of financial strategy on taxes, Patterson says.

“CPAs historically are not proactive,” he says. They generally do not advise small business owners on pension plans, profit sharing plans, or Section 125 Employee Benefit plans, he says. That would be the role of the financial advisor and the CPA would explain how those plans would impact the clients tax status.

Most financial advisors have a large client base of small business owners and entrepreneurs, Patterson says, who adds that CPA firms are among his clients.


Reproduced from National Underwriter Life & Health/Financial Services Edition, July 8, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.