Tax Preparer doing Financial Planning and Investments

[John of PA]

For those of you who have gone into Financial Planning and have taken the securities exams and still do tax prep, what has been your experience. Was it worth your while? Do you just refer to a planning outfit for a finders fee or do you actually do the investments paperwork? Did you have a problem with annual minimums to reach? Have you lost any good tax clients because they were dissatified with thier investments? Any input I would welcome as I am considering this avenue.

[Uncle Sam]

Financial Planning

I attempted financial planning just over 10 years ago. I did it because I thought it would attract clients to stay with me.
I had the Series 7 license with a regional firm who sold out to Genworth Financial Securities.
I maintained the license (annual renewals that aren't cheap) because I really was looking for more client loyalty rather than the commissions you get.
And it didn't work out because I'm not really the salesman type.
I prefer providing services and getting paid a fee for what I do.
In the financial accounting world - you get paid a commission for what you sell - rather than a fee for the advice you give.

So I wound up giving it up - it wasn't cost efficient any longer - and with the type of economy we've had the last few years - clients have had less and less funds to invest with.

All I wound up getting in the way of client business for financial planning was setting up IRA, SIMPLE, SEP plans, almost nothing in the way of personal investments.

Although I attempted in the beginning of informing my entire tax practice of my Financial Planning license, almost all of them retained their relationships with their current brokers.

[MLINDER42]

Financial Planning

Personally I have always thought it to be a conflict of interest to sell securities.I think our job is to be a second opinion for our clients.It is hard to give a second opinion on some thing you sold them.Also I believe if you sell mutual funds from only one company thy do not have the best funds in every category.Also I believe in no load mutual funds or EFT'S,This is my opinion and I know other people feel different.

[jimmcg]

It has been my experience and preference that properly negotiated and worded finder fee agreements work best. I have more demand than I want for representation work and don't miss the addtional regulations and paperwork.

[JoshinNC]

Works for me

Adds about $25-50k per year in revenues and I never have to explain taxes to a client's advisor so that he can make the commission.

PM me and I'll send you ino on may back office support.

[Roberts]

I passed my Series 6 and insurance licenses in 1989 and my Series 7 in 1990 while still in college. Passed the CFP in 1995 (let it lapse around 2000 along with the insurance licenses). Passed the EA in 2004. I can't imagine how coordinating financial planning, investment planning and tax planning (along with execution of the plans) could be a bad thing. The wealthy coordinate it, why shouldn't the middle class at a reasonable price?

If you are going to do it, don't become a product salesman. It'll be a sledge hammer to the relationships you currently have. Provide a complete suite of SERVICES to a specific market and your clients will never want to leave.

You are a tax professional. Have you checked the beneficiaries on every one of your clients IRAs and similar accounts? 80% chance the financial advisor hasn't talked to the client about it since the account was opened. You know how important it is and the tax savings. The investment guy doesn't care.

[AZ-Tax]

I had my Series 7 since early 80's

I started out with my Series 7 back in the early 80’s followed by my insurance license in and Series 24 all before 1990. In the beginning I was told to create a cozy relationship with tax preparers especially CPA’s. Ended up being mostly a waste of time then tax preparers started to obtain their securities license therefore I slowly got into the tax prep and passed my EA. If the tax client is also your securities client, don’t have to worry about obtaining tax related docs like cost basis which means no communicating with their advisor, broker, rep etc. who in most cases can be a nightmare to deal with. I have acquired many many new securities clients via new tax clients that are often “orphan” accts. This can be gravy commission as most of you know who have securities licenses. Understand John, obtaining a Securities license is quite a bit different then obtaining an insurance license, EA or RTRP license. You will need to be sponsored by a Broker Dealer (BD) to sit for the exam and BD’s are placing more and more pressure on production. Also, BD’s are passing on most of the fees therefore it’s going to cost to obtain and maintain a securities license. Oh, yea, yearly CE’s to maintain your securities license. I suggest when you search for a BD, consider an “independent BD” for if you ever decide to leave the BD, you most likely can change the Rep and BD w/o having to change the investments for your clients.

[Roberts]

I suggest when you search for a BD, consider an “independent BD” for if you ever decide to leave the BD, you most likely can change the Rep and BD w/o having to change the investments for your clients.

Good grief yes, follow this. Most cities have a dozen small independents that will allow you to run your business through their books for a slice of your commissions. I know a small broker dealer locally that probably has 100 brokers and they almost all average around $30k in commissions per year.

[John of PA]

Thank you all for these helpful comments.