Why you should start offering financial services to your clients
By Joseph Graziano, CFPÂ®.
Your accounting firm offers valuable services to your clients. But what if you could take that value up a notch and help them with their financial planning needs? Many companies are doing just that and are branching out into offering other financial services that their clients may need.
From retirement planning to individual insurance, there are many valuable financial services you can offer your clients. And now is the best time to start offering these services. Here’s why.
Why Now is the Best Time to Offer Financial Services to Clients
Adds value to your practice
Many accounting firms typically focus on a few services, such as:
- Tax preparation
- Tax planning
- Bookkeeping account
However, your clients want and probably need more financial services, such as retirement planning. Providing these services adds value to your practice.
Plus, when your customers feel they can turn to you for a large part of their financial planning needs, you can improve their loyalty.
Your firm already has a solid clientele and you already know the financial situation of your clients. 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, lower their taxes, save for retirement, or help them with a range. other financial planning needs.
Providing financial services does more than just help your existing customers. It can also help you attract new customers. If other accounting firms in your area only offer tax preparation and planning, offering additional financial planning services will give you an edge over the competition.
Financial planning services are in demand. that’s why 54% of CPAs now offer retirement planning.
Gives you a smooth cash flow throughout the year
Many accounting firms struggle to maintain stable cash flow throughout the year. When your primary focus is on tax services, your clients will typically not need your services until late in the quarter or during tax season.
If the bulk of your income comes from tax preparation, cash flow may be limited the rest of the year.
But when you offer financial services in addition to your basic services, customers can turn to you for help any time of the year. Your financial services act as an additional income stream to provide a smooth cash flow all year round.
Allows you to serve as a one-stop-shop for clients’ financial needs
Providing financial planning services allows your business to act as a one stop shop for your clients’ financial needs. Your customers already know you and trust you. If they need additional financial services that you can now provide them, they may be more inclined to use your business rather than working with someone they have no relationship with.
If you expand your services to include financial planning, your business could save them the hassle and frustration of researching, evaluating, and comparing other vendors. In addition to adding value to your practice, you also provide convenience to your existing clients.
When to start: during your post-pandemic registration
A lot has happened in the past year or two. Markets are rising, some companies have grown and others are struggling to return to pre-pandemic income levels and portfolios have benefited from a rising stock market.
However, tax season is a great time to do a post-pandemic check-in for customers who need help or have questions about:
- Investment planning
- Individual insurance
- Retirement planning
- And more
A financial record provides the opportunity to learn what clients need while providing them with the services they want.
What about the fees? How much should you charge?
If you’ve decided to start expanding your service offering to include financial planning services, you might be wondering how to bill customers for your new offerings.
There are many pricing models that you can use, but the most common include:
Some accounting firms use a fixed-fee pricing model for their financial planning services.
Fixed fees can be beneficial for both clients and your business. Customers know exactly how much they’ll pay for your service, and you’ll have an easier time convincing customers to join your new services.
Some companies include an annual increase in the cost of living in their fees.
Hourly fees are less and less common, but this pricing method can be a good option when accounting firms start working with a client. When you charge an hourly rate, you’re covered for unexpected resource usage while you determine what services the new customer needs.
At the same time, some clients may only have the budget for 10 hours of work, so when you have worked 10 hours, you need to stop or renegotiate the price.
Commission-based pricing is a popular option for companies when offering asset under management (AUM) pricing models. For example, you can charge a 1% fee for actively managing a person’s $ 1.5 million retirement account. As the value of the account increases, you and the customer are
As the account grows and assets increase, you will naturally earn a higher commission, which will allow you to account for the extra work involved.
Fees + Commission
A fee-only financial planner is different from a fee-only advisor, and they earn:
- Fees for services, such as managing a portfolio
- Commission when purchasing certain products, such as insurance or for investments sold
It is important to note that the commission often does not come from the customer but rather from the company offering the product. For example, if the client purchases life insurance on your recommendation, the life insurance company will pay you the commission.
Fixed Annual Fees
Some accounting firms are taking a bolder approach by offering a one-time fixed fee for their financial planning services.
Like the fixed fee model, this fee structure is transparent and predictable. Customers know how much they will pay for your services, and they only have to make one payment for the year. Your firm can regularly reassess and adjust your fees based on the client’s current needs.
Providing financial planning services can help your accounting firm grow and prosper. But getting started can seem overwhelming. Rather than taking on this new line of services yourself, your business may consider partnering with a third-party company that offers financial planning services.
Joseph Graziano, CFPÂ® is vice-president and partner in wealth management at FFP Wealth Management. Through the management of FFP, 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 the urgent need for accountants and financial planners to join forces to provide high-end services to their clients. If you have any questions about adding financial planning services to your business, you can contact Joe here.