Rather than seeing their businesses decline this year, accountants and tax professionals could actually see considerable growth as clients seek professional advice regarding which business and personal financial levers to pull to help minimize their tax obligations under the new law.

Certainly, tax preparation will remain a mainstay for small and mid-sized accounting firms, but that’s no reason to become complacent. These days even established firms blessed with a loyal base of individual and small business clients face growing pressures. H&R Block and other mass-market tax preparation operations have rendered the services into a widely available commodity. Technology created the likes of TaxAct and other online tax preparation services used by so-called millennials to prepare their own returns. Older clients pass away, and their children may decide to do without your services. So, unless you can bring in new clients willing to pay for traditional accounting services, the need to diversify your business remains the road to future growth.

The upside is that taxes and investments are confusing and intimidating, which is driving more and more people to seek professional help in dealing with them.  Ideally they’d like that help to come from a single source, which provides the tax professionals they already trust with their most sensitive information, with an ideal opportunity to expand their service offerings. Surprisingly, more than one-third of financial advisors never see their clients’ tax returns and so are unable to help them identify ways to minimize their tax burdens, even if that’s within their skill set.

Being able to access tax preparation, financial services and investment management with a single firm can go a long way toward simplifying clients’ finances and improving their lives by helping them address long-term needs like retirement and estate planning.

Combining tax planning and financial advising services is especially a good fit for small accounting firms. After all, every financial decision a client makes, be it setting up a 401(k) plan, selling a business or buying a house, can have short and long-term tax implications. As a tax professional, clients already trust you with their detailed financial information—everything from annual salaries and bank account balances to the makeup of their investment portfolios—necessary to complete their annual returns. With this information at your disposal, you can develop deeper, more meaningful (not to mention more lucrative) relationships with existing clients.

From a business perspective, expanding your service offering can help with client retention, bring in more referrals, and boost your firm’s gross revenue. A survey conducted for HD Vest among accounting and tax professionals, found that those who brought financial planning services into their practice generated an average of $1.7 million in incremental revenue over 5 years, leading to $670,000 of incremental profit. Additionally, the majority of HD Vest Advisors believe adding these services has increased client retention, referral and growth rates for their practice.[1]

But even more importantly, by adding financial services your clients stand to benefit from having the same persona handling both their taxes and financial strategy. It allows for tax efficiency, coordination of their personal and business finances, and a deeper relationship with their most trusted advisor. Making this shift is not as hard as it sounds. Many accounting firms are already offering tax consulting, retirement planning and estate planning. For these firms all that’s really missing from the mix of advisory services is investment management and a risk assessment.

Most clients would love to get comprehensive financial services along with their tax preparation. CPAs who adopt a wealth management business model are positioned to provide personalized and impactful advice aimed at meeting a client’s long-term financial goals and reducing their annual April tax bite. And that’s a winning combination for everybody.

To get more information on diversifying your tax practice with wealth management services, click here.


[1]HD Vest whitepaper: “Enriching Your Tax Practice Through Diversification”, based on an online survey conducted in December 2017 by IPSOS Research among 229 accounting and tax professionals. Of the total base, 141 respondents are HD Vest Advisors who currently offer wealth management /financial planning services to their accounting/tax clients.