What Are You Doing After Work? The Role of Wealth Management for Retiring Accountants

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As a CPA, you likely have advised your clients to plan years ahead before retiring and or sell their respective businesses. Unfortunately, many accountants fail to take their own advice and wait too long to start the process of succession planning. Many accountants plan to work full time in their firms until they don’t or can’t work anymore and then sell it. There may be alternative approaches to your succession/retirement. This blog post explores the possibilities of partnering with a wealth management firm to maintain your client relationships, increasing the value of your business, and potentially creating a better quality of life while not losing independence.

For CPAs looking to sell their practice, having a robust base of wealth management revenue can significantly increase the value of the business. Studies show that firms offering wealth management services get a lift in the multiple of the value of their firm due to recurring revenue.

Carving off the Wealth Management portion of your practice.

An alternative option for accountants near retirement is to carve off the wealth management division of your business as a separate entity. This approach allows you to continue being the primary point of contact for clients who you have spent years developing a trusting relationship with. Your involvement with a wealth management company will allow you to continue receiving fees and leveraging your tax expertise. By establishing this separate entity, you can maintain your client relationships and explore new avenues to provide value without the burden of running a full-scale accounting practice.

Addressing Concerns About Value and Earnings:

A common concern among retiring accountants is whether they can continue to provide appropriate value to clients to justify a referral fee. Here are some rebuttals to address this concern:

  1. Consistent Point of Contact: By partnering with a wealth management firm, you become a consistent point of contact for the advisor, ensuring continuity and a seamless client experience. Clients value the familiar faces and expertise they've relied on for years. And who knows your client better than you?
  2. Working Smart with Technology: Emphasize that retirement doesn't mean you stop working altogether. Instead, it allows you to work smart by leveraging technology and innovation tools. This enables you to serve clients more efficiently and potentially earn more in the process.
  3. Collaboration and Delegation: Partnering with a wealth management firm means you can collaborate with professionals who specialize in wealth management, allowing you to delegate certain aspects of the work. This collaborative approach ensures clients receive comprehensive and expert advice while freeing up time for you to focus on your strengths.
  4. Earned Expertise: Your deep understanding of tax matters, financial planning, and wealth management makes you an invaluable resource for clients seeking guidance during their retirement years.

Navigating Non-Compete Agreements:

A potential hurdle when selling a practice is the non-compete agreement that may prohibit you from working with existing clients; typically on compliance matters typically provided by a CPA firm. However, by working proactively with Wealth Stewards prior to selling your practice, you can strategize and plan for the future. You are not competing in the traditional accounting services that the firm will be providing.

Wealth Stewards can help explore alternative structures or strategies that align with your goals, allowing you to continue working with clients or conducting referrals in a way that makes sense for everyone involved.

Every CPA and firm is unique, and the retirement journey is personal. Partnering with a wealth management firm can be a powerful solution for accountants near retirement, offering the opportunity to maintain client relationships, increase the value of the business, and continue providing value as a trusted resource.

At Wealth Stewards, we understand the complexities of this transition and would be delighted to meet with you to discuss your goals and objectives. Ask yourself. What are you doing after work? And contact us today to discover what path is right for you.

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