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Financial Planning > Tax Planning

Model of the Future?

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You may have heard the disputed rumor that accountants will inherit the planning earth, but you may not have heard of a broker/dealer that caters specifically to CPAs moving into planning. That’s what Dave Reedy started in the early 1980s when he founded a B/D named Terra Securities. Reedy says the number of reps and revenue have tripled since he sold Terra to GE five years ago; it does business these days as the GE Independent Accountants Network, or IAN, and has more than 1,200 representatives spread around 42 states. Reedy, president of Chicago-based IAN, says that 60% to 70% of IAN’s reps are CPAs, and the balance are tax preparers, though he notes that more CFPs are joining the B/D’s ranks. Reedy discovered early on the “power” of delivering financial planning from the position of the CPA. For one thing, Reedy notes that the typical IAN rep has 400 to 500 clients, and since “his bills are paid” from his tax practice, that makes him less likely to sell the client a product the client doesn’t need just to get the commission. If there’s any cultural flaw that accountants have, Reedy says, is that they’re so focused on keeping costs down, that when it comes to recommending investments, they’d prefer to do nothing rather than do something wrong. As for the complaint that accountants don’t make good salespeople, Reedy agrees. He argues, however, that “much of the public is tired of good salespeople. They’d prefer somebody they just trust, who has a good knowledge approach, and is very conscious of cost. We often joke that accountants are the cheapest people in the world, but they really are.” That focus on costs is, of course, good for clients.