A guaranteed path to success
One firm’s formula for financial planning
BY RiChARd A. BeRkowitz
Paradigm shifts in the delivery of financial services and products have opened up enormous
opportunities for CPAs to take their rightful place as principal financial advisors to their clients.
The remaining large brokerage houses
continue to require large production mini-
mums of their retail advisors. Clients want
to understand why they are buying financial
products and they want to be properly ad-
vised, instead of simply being sold the “in-
vestments du jour.”
An estimated 40 percent of all public ac-
counting firms are now offering some form
of financial or wealth management services.
CPA firms have been utilizing the traditional
model of delivering financial services and
products, leading to moderate success. This
article is about how my firm achieved a suc-
cessful and sustainable financial planning
practice and developed clients who are rav-
ing fans in a relatively short time frame.
Most firms have established their CPA financial service models in the same way that
they established their other successful niche
practices. A partner was designated as the
champion, and that partner who had an appropriate financial planning background was
designated to lead the practice.
The problem with this approach is that
CPAs have not been trained to be successful financial planners. Financial planners are
trained in the art of selling financial services.
They know how to sell financial products, including life insurance, and how to deal with
objections and rejections. Although there is
similar training in the fields of estate planning, income tax planning, deferred compensation and related financial planning fields,
CPAs simply do not have the sales and financial product background and knowledge that
financial planners develop as they come up
through the ranks.
Successful financial planning firms em-
ploy successful financial planners. CPAs
may be trusted advisors to their clients in
the financial planning field, but they are not
trained in the techniques that are required to
motivate clients to complete their plans and
purchase the products that will help them
fund those plans. Good financial planners
and CPAs are ethical, have integrity and are
motivated to help clients achieve their finan-
cial objectives, while maintaining objectivity
and making a living. However, the integrated
effort of the two approaches is more power-
ful than their independent efforts.
OUR APPROACH
In 1999, Florida amended its accountancy
statute to allow CPAs to earn commissions
and contingent fees. Our firm, Berkowitz Pollack Brant, was working with a financial planning group in South Florida and invited them
to form a joint venture called Provenance
Wealth Advisors. PWA was formally established in February 2000. Since this time, P WA
has grown from $100 million to more than
$1.5 billion in assets under management. Our
success has been based on referrals from satisfied clients and minimal external marketing. Today Berkowitz Pollack Brant is ranked
among the top ten CPA firms with assets under management in the country.
This success is based on a symbiotic culture and a process focused on complete CPA/
planner integration. Our collaborative joint
culture focuses on comprehensive financial
planning for each client. CPAs and planners
are involved in every step of the plan and
their work and client contact are integrated
into the process that is undertaken with each
client. A key aspect of the culture is that the
CPA/client relationship is protected and enhanced by the planners, and they are trained
to make certain that the CPA’s role is primary.
The planner’s role is to assist the client and
the CPA in finding appropriate solutions.
information that is provided by a prospect
and preparing the PCA truly represents the
marketing cost for our firm. Preparing a PCA
for a prospect with a seven-figure estate will
run about $5,000-$10,000. This substantial
commitment is a good investment because
a completed PCA will result in the prospect
becoming a client in excess of 90 percent of
the time.
Once the PCA has been completed and the
planner and the CPA have met with the client
to review it, we usually see a paradigm shift in
understanding the existing plan. The CPA and
the financial planner are able to communicate with the client on an entirely enhanced
level of understanding. Most of the time the
client will understand that their estate plan
has not been implemented properly, that it
is not what they thought it was, or that it has
not accomplished their specific goals.
Prospective clients become clear on what
they want to accomplish and are grateful that
the issues that have been raised have been
brought to their attention. A fee is proposed
for an engagement to complete whatever tax
and financial planning is required to mitigate
the issues that have been identified as problems with the present estate, financial and
business succession plan.
tinuous effort to finalize the plan. The plan is
documented with a drafting checklist that has
been developed by BPB and PWA. Over time,
BPB and PWA have worked with several law
firms to create consistent forms that do not
change every time, allowing rapid review of
documents and a shorter time from initiating
the case through execution.
ENGAGING THE CLIENT
Once we identify a prospective client, we offer a free present-condition analysis. A PCA
is a snapshot of the client’s current financial
situation, including their estate and financial
plan, insurance plan, investment portfolio
and succession plan. We find that the majority of clients have never looked at all of these
subjects in tandem.
Obtaining the information necessary to
prepare a PCA is a key aspect of taking a
prospect to the next level of becoming a client. Whether it is an existing or new client of
the CPA firm or a prospect identified by the
financial planning firm, the key is obtaining
the necessary financial information to analyze to get a complete and accurate snapshot
of the prospect’s financial life. Analyzing the
THE PLANNING PROCESS
Once engaged, the financial planner and
the CPA conduct additional fact-finding and
gathering of data. They work together to formulate a revised plan that meets the client’s
objectives and they allocate the responsibilities that each of them will have in executing the case. At the next meeting, the client
receives a written comprehensive financial
plan that is presented to them in detail by the
planner and CPA, who each have pre-deter-mined roles in presenting the plan. The joint
presentation is again intended to enhance
the central role of the CPA, while allowing the
planner time to establish a strong supporting
role with the client.
The process of formulating and finalizing
the financial plan for the client may take
multiple meetings. However, the planner
is responsible for making certain that the
process stays on course and there is a con-
COMPLETING THE PLAN
Following execution of the various legal
documents, an integrated effort by the CPA
and the planner is undertaken to complete
all aspects of the client’s plan. We follow a
checklist to ensure that all assets are retitled
and transferred to appropriate entities, and
all the necessary documents are executed by
all parties. The CPA and the planner make
sure that the appropriate compliance is prepared by the CPA firm, and that changes in
the client’s structure are understood. This
is facilitated by a year-end tax and planning
meeting with each joint client of the CPA firm
and the planning firm.
The coordination, integration and collaboration between the CPA and planner
have been choreographed to ensure that the
client’s objectives have been carefully addressed and, more important, implemented. Our process is fully documented and our
people are trained to execute each case the
same way. While the upfront investment is
great, the resulting consistent success has
created raving fans of our clients and a growing financial planning business.
As CPA firms across the country look to
deepen relationships and develop new revenue streams, a collaborative approach to
helping clients meet their long-term financial plans in difficult and complex economic
times is a powerful tool. AT
Richard A. Berkowitz, JD, CPA, is the
founder and managing director of Berkowitz
Pollack Brant, a Top 100 Firm with offices
in Miami, Ft. Lauderdale and Boca Raton,
Fla., as well as chairman of the board of
Provenance Wealth Advisors. Reach him at
(305) 359-7000 or berkowitz@bpbcpa.com.
