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How Financial Planning Will Lead to More Business


Financial planning is often mentioned as an advisory service accounting professionals should offer clients. However, additional licensing is usually an issue for CPAs. You may be wondering what services you can offer and how it fits in as a billable business service. Here, expert Bryce Sanders discusses the types of planning you'll be able to help your clients with

27th Jun 2022
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It’s been said: “Getting money and keeping money are two different skills.” Another familiar expression is: “Money talks: It says goodbye.” You’ve heard the stories of professional athletes who got into financial trouble and lottery winners who went bankrupt. When things are going well, too many people think money comes from a fountain that will never run dry. People need help retaining money, minimizing taxes and creating wealth.

Accountants are often associated with filing tax returns. They take data from past events like money earned, donations made and taxes prepaid, then organize and report it to legitimately minimize the client’s tax bill. Financial planning is an exercise in looking into and preparing for the future. You are planning for things that are presently unknown. Although you know what the weather was on Christmas Day of last year, you do not know what the weather will be on Christmas Day three years in the future. However, you know weather runs in cycles and there is a high probability it will fall within a range.

Financial planning has value. Clients might consider filing a tax return an annual transaction. You pay a fee, the task is completed, and you do not pay again until the task is repeated. Financial planning is a process. Professional athletes may be naturally gifted, but they work with coaches to develop their talent and get them into the big leagues. They continue working with coaches afterwards. Put another way, your client might be naturally gifted with making money, but they need a financial coach to help them keep it and make the money work for them.

What Are the Major Building Blocks of Financial Planning?

Financial planning helps your client develop a strategy to help reach their short- and long-term goals. When you have a long-term time horizon, a modest rate of return can build substantial wealth over time. Investopedia notes if you make a $6,000 annual contribution to an Individual Retirement Account (IRA) for 50 years, you would accumulate about $3.7 million dollars if you had an 8 percent rate of return.

I would consider the following activities the main areas of focus for financial planners. Each meets a client need that could be billed either on an hourly basis or as a defined activity, with additional billing for future review meetings. They are as follows:

  • Retirement Planning. This involves planning to accumulate sufficient assets that can provide income for a desired standard of living in retirement in combination with defined benefit income streams, like Social Security. An IRA and a 401(k) can build wealth using pre-tax dollars, while other investments can be made in taxable accounts. The process involves projecting outcomes based on probabilities, often called the Monte Carlo analysis. Retirement planning transitions into budgeting after the client retires. 
  • Education planning. Saving for college education used to be a major goal for Baby Boomers when planning their children’s future. “College” was seen as a four-year expense; then, their child entered the world of work. Today, education expenses might start in preschool and continue into postgraduate studies. Like retirement planning, this is an exercise the client “must get right,” or it will cost them later on.
  • Estate planning. You have heard the expression “More money, more problems.” Estate taxes are charged at both the federal and the state levels. Where you live and die impact the amount of money you ultimately owe. Although you can’t take it with you, most people want to maximize the amount of money they pass on to their heirs.

Then there are other areas of financial planning that may require attention:

  • Liability management. How much you owe, what it costs you to carry debt, and the tax deductibility of the interest make up additional aspects of financial planning. If your client carries variable rate debt in a rising interest rate environment, it can become increasingly expensive.
  • Risk management. It has often been said life insurance buys peace of mind. For young families, income replacement is an issue if one of the breadwinners dies prematurely. Having proper replacement value coverage for their home and contents is also an issue in case of disaster.
  • Special needs children. Most people expect their children will go to school, graduate, enter the workforce and build their own families. In some cases, they may have a child who will remain a dependent for medical reasons. The parents are capable of caring for their child during their own lifetimes, yet they need to make provisions for when they are no longer in the picture.
  • Healthcare. Clients need to carry health insurance. This can be a growing expense, exceeding the rate of inflation. Clients need help understanding the coverage they need and the costs.
  • Budgeting. Financial planning can be customized to address many needs, yet day-to-day life often returns to which bills need to get paid and when. Clients need to learn how budgeting works, how to live within budgets and how to prepare for financial emergencies.  


Once your client understands they need these services, you would likely provide financial planning as a bundled service or provide only the specific segments they choose. You might use a fee-only model, meaning you develop a plan that is portable. They can implement your advice on their own or through a financial advisor. Your accounting practice could also expand into providing investment services directly, which might be based on an assets under management fee based pricing model. The second option would be a step away from a fiduciary approach, since you are also the provider of the investments. Many clients who feel you have their best interests in mind will be comfortable with this pricing model. This brings in recurring revenue and eliminates the need to charge for financial planning services on an hourly basis.

As an accounting professional, two benefits you bring to the table are your experience and advice. You need to be comfortable with the concept that your advice has value and should not be dispensed for free, because you consider the solution obvious. Common sense is not common. 

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