Why You Should Start Offering Financial Services To Your Clients

Why Now is the Best Time to Offer Clients Financial Services

Adds Value to Your Practice

Many accounting firms typically focus on just a few services, like:

• Tax Preparation
• Tax Planning
• Bookkeeping
• Accounting

However, your clients likely want and need more financial services, such as retirement planning. Offering these services adds value to your practice.

Additionally, when your clients feel like they can turn to you for much of their financial planning needs, you can improve client loyalty.

Your firm already has a solid client base, and you already know your clients’ financial situations. Offering financial planning is a natural next step, and it allows you to use the information you already have to help clients grow their wealth, decrease their taxes, save for retirement or assist them with an array of other financial planning needs.

Providing financial services does more than just help your existing clients. It can help you attract new clients as well. If other accounting firms in your area are only offering tax preparation and tax planning, offering additional financial planning services will give you an edge on the competition.

Financial planning services are in-demand. That’s why 54% of CPAs now offer retirement planning.

Gives You Smooth Cash Flow Throughout the Year

Many accounting firms struggle to maintain steady cash flow throughout the year. When you’re focused primarily on tax-related services, your clients will generally only need your services towards the end of the quarter or during tax season.

If the bulk of your revenue comes from tax preparation, cash flow may be limited the rest of the year.

But when you offer financial services in addition to your core services, clients can come to you at any time of the year for help. Your financial services act as an additional stream of income to provide smooth cash flow year-round.

Allows You to Serve as a One-Stop-Shop for Clients’ Financial Needs

Offering financial planning services allows your firm to serve as a one-stop-shop for your clients’ financial needs. Your clients already know and trust you. If they’re in need of additional financial services that you can now provide, they may be more inclined to use your firm rather than working with someone with whom they have no relationship.

If you expand your services to include financial planning, your firm could save them the hassle and frustration of having to research, evaluate and compare other providers. Along with adding value to your practice, you’re also providing convenience to your existing clients.

When to Get Started: During Your Post-Pandemic Year Check-in

A lot has happened in the past year – or two. Markets are rising, some businesses grew and others are struggling to return to pre-pandemic revenue levels and portfolios have benefited from a rising stock market.

However, tax season is a great time to perform a post-pandemic check-in for clients who need help with or have questions about:

• Investment planning
• Individual insurance
• Retirement planning
• And so much more

A financial check-in offers the opportunity to learn what clients need while also offering them the services they want.

What About Fees? How Much Should You Charge?

If you’ve decided to start expanding your service offering to include financial planning services, you may be wondering how to charge clients for your new offerings.

You can use many pricing models, but some of the most common ones include:

Fixed-Fee

Some accounting firms use a fixed fee pricing model for their financial planning services.

A fixed fee can be beneficial for both the clients and your firm. The clients know exactly how much they will pay for your service, and you will have an easier time getting clients to jump on board with your new services.

Some firms incorporate an annual cost of living increase in their fees.

Hourly

Hourly fees are becoming less common, but this method of pricing can be a good option when accounting firms first start working with a client. When you charge an hourly fee, you’re covered for unexpected use of resources while you determine the services the new client needs.

At the same time, some clients may only have the budget for 10 hours of work, so when you’ve worked 10 hours, you would have to stop or renegotiate the price.

Commission-Based

Commission-based pricing is a popular option for firms when they offer assets under management (AUM) pricing models. For example, you may charge a 1% fee for actively managing a person’s $1.5 million retirement account. As the value of the account increases, both you and the client are

As the account grows and the assets increase, you’ll earn a higher commission naturally, allowing you to account for the additional work involved.

Fee + Commission

A fee-based financial planner is different from a fee-only advisor, and they earn:

• Fees for services, such as managing a portfolio
• Commission when you purchase certain products, such as insurance or for investments sold

It’s important to note that the commission often doesn’t come from the client but rather the company offering the product. For example, if the client purchases life insurance on your recommendation, the life insurance company will pay the commission to you.

Annual Fixed-Fee

Some accounting firms take a bolder approach by offering a single, annual fixed fee for their financial planning services.

Like the fixed-fee model, this fee structure is transparent and predictable. Clients know how much they will pay for your services, and they only have to make one payment for the year. Your firm can reassess regularly and adjust your fee based on the client’s present needs.

Offering financial planning services can help your accounting firm grow and thrive. But getting started may feel overwhelming. Rather than taking on this new service line entirely on your own, your firm can consider partnering with a third-party firm that offers financial planning services.

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Joseph Graziano, CFP® is the Vice President and Wealth Management Partner at FFP Wealth Management. Through FFP management, Joe and his team help manage over 2.4 billion in assets. FFP Wealth Management has served the unique needs of the accounting community for over 28 years and was formed out of dire need for accountants and financial planners to join forces in providing premium services to their clients. If you have questions about adding financial planning services to your firm, you can contact Joe here.