Tax law spurs demand for wealth management advice

By Admin

March 4, 2018

CPAs are seeing more demand for wealth management and financial planning advice with the passage of the new tax law.

“Generally speaking the tax law changes have created even more conversations between financial advisors and their clients about what it might mean to their saving and investment plans, and what it might mean to their ability to retire,” said David Knoch, president of 1st Global, which works with approximately 400 CPA firms to help them grow their wealth management practices. “Since the financial planning process is something that is continually revisited, at least annually, we should probably be reviewing the plan. It’s what you keep, not what you make, that matters more than anything else in that financial plan, so there’s a strong integration between financial planning and tax planning. This tax law change has been one reason why our firms have been having more conversations early in this year around their clients’ financial plans.”

As the Department of Labor hesitates to enforce the fiduciary rule proposed during the Obama administration for financial advisors, clients are turning to a trusted advisor in the CPA to help them deal with the wealth management and retirement planning implications of the new tax law.

“The more conversations that the financial services industry has about who can I trust and how do they serve me and how are they supposed to serve, and what should I be expecting out of a financial advisor, are going to continue to push more and more clients to the CPA, who is in wealth management,” said Knoch. “Gallup says the CPA is the seventh most trusted profession in America. Stock brokers are pretty low down the list. In a lot of cases, we would love to see people turn to their CPA and say what do I do, whether that’s the tax law, or what the DOL rule means to them, or whether it’s what a digital advisor means. I’m going to guess that the CPA is a source of truth for a lot of clients. We’re having more conversations with CPA firms now as these financial headlines come up more than they have been in a while.”

He noted that the fiduciary rule affects all kinds of wealth management advisors.

“It doesn’t impact CPA firms uniquely from other wealth management firms,” said Knoch. “The impact on wealth management firms across the board is the same. The DOL’s conflict of interest rule basically requires that when a financial advisor is giving advice to a retirement plan participant, you’ve got to be giving advice that’s in the client’s best interest.”