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Financial Planning > Tax Planning

How a CPA Partner Can Boost Your Practice

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What You Need to Know

  • Taxes play an important part in investment planning, so an advisor partnering with an accountant can be extremely valuable.
  • Adding tax services can help advisors stabilize income, increase cash flow and give their practice more flexibility.
  • Becoming more digital makes it easier to share critical financial data between the advisor and CPA.

As every advisor knows, sound investment advice should incorporate some semblance of tax planning, or at least a rough calculation of the tax impact of a given transaction.

But more often than not, when a client asks an advisor about their tax liability, they’ll often hear, “I can’t give you advice on that. You’ll have to talk to your tax expert.” This is where advisors partnering with a tax expert can provide a more seamless client experience.

Advisors and accountants may have expertise in various financial matters and situations, but the licensing, credentials and focus of each professional are specialized. Accountants are licensed to provide tax advice and counsel and help prepare annual tax returns and/or estate tax returns.

Within corporations and businesses, accountants also may help administer payroll, audit financial information and help prepare budgets, business plans and financial statements.

Advisors are licensed to give investment advice and develop comprehensive financial and wealth management plans. An advisor’s services can include portfolio construction as well as risk management, retirement income strategies, estate planning, philanthropy strategies and more.

Because taxes play an important part in each of these elements, an advisor partnering with an accountant can be extremely valuable.

Although some people don’t necessarily seek out financial advisors when it comes to investing advice, everyone has to pay taxes. Therefore, most people will opt for a CPA before seeking out an investment advisor, which means the CPA can provide a great new business channel for advisors.

In addition, diversifying an advisory practice by adding tax services can help protect your firm from seasonal and business cycle slowdowns. Because tax services and financial planning services are not necessarily interconnected from a timing perspective, the two activities can lean on each other.

Creating diversification helps stabilize income, increase cash flow and gives an advisory practice more flexibility.

Marriage Perks

Most people try to minimize their taxes. What do clients do with the money they save on their taxes? It’s very much like an Olympic relay. A taxpayer will look to a CPA to hand off their taxes to minimize those payments.

The CPA then handles the compliance work, which in the end saves money, and passes the baton back to the financial advisor to invest that money that was saved. The baton pass can be as smooth as possible, if the CPA and advisor work together.

Investment advisors and wealth management firms want to provide the optimal in client service.

By partnering with a CPA, they can provide their clients the best of two worlds from a financial perspective, by helping to grow the client’s money and the CPA helping to minimize the tax burden. And because both are in a client service business, they have a profound understanding of what it takes to provide the best client service.

How to Make the Marriage Work

  • Become more digital: This makes it much easier to share critical financial data between the advisor and CPA.
  • Understand client needs: Think about what your client needs in terms of tax services; look at affiliations and associations for guidance and recommendations; speak with your clients about who they use for tax/accounting services. If you are going to give a CPA a chance, you need to make sure they have good references. Check out their websites to see if they mention specific clients and if so, be sure to conduct your due diligence.
  • Try before you buy: Find a friendly client who might already work with a CPA. Get a real test for it but make sure you manage the relationship. The client is on the journey with you, and once you have a good feeling about it, then you have a good idea if the CPA makes a good partner.

Finding the right CPA partner for your investment firm can generate significant financial incentives for your firm while delivering the highest quality and complete client experience.

Steve Cox is head of accountancy and an evangelist for IRIS Software. He has 19 years of experience within the IT and software market.


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