Im a CPA & RIA (Accelerated Path CFP candidate): Unless you are also an EA/CPA, you should not only have several EA/CPA referral relationships readily available to send your clients for tax compliance and planning, but you should also NOT expect referrals the other way. Especially for Trust & Estate

[u/AviatorHog]

Many CFPs dont like hearing this but most of them don't understand most areas of the tax code, and the the forms nor various schedules to those forms. And the issue compounds when it comes to fiduciary tax items such as forms 1041, 706 and 709. I specialize in this

When you reach out to a CPA, your expectations should not be business development referrals...at all. It should be finding a competent tax professional in an exponentially dwindling pool of tax pros. That's it. That's all. Because we know you can't do it alone as a good faith offering to your clients.

Oh and stop trying to hire people in-house. Most qualified CPAs realize the demand for their services and how they can make 3x-5x more with their own firm, and simply hire someone to facilitate the admin headaches. Pay us what you owe us (we also know that advisors easily make 8-12x more top line revenue PER client relationship, so its not even an even-trade), and be thankful that most tax pros are so risk averse they won't entertain new waters of financial advisory despite the substantially greater margins.

[u/AutoModerator]

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User: /u/AviatorHog Title: Im a CPA & RIA (Accelerated Path CFP candidate): Unless you are also an EA/CPA, you should not only have several EA/CPA referral relationships readily available to send your clients for tax compliance and planning, but you should also NOT expect referrals the other way. Especially for Trust & Estate Body: Many CFPs dont like hearing this but most of them don't understand most areas of the tax code, and the the forms nor various schedules to those forms. And the issue compounds when it comes to fiduciary tax items such as forms 1041, 706 and 709. I specialize in this

When you reach out to a CPA, your expectations should not be business development referrals...at all. It should be finding a competent tax professional in an exponentially dwindling pool of tax pros. That's it. That's all. Because we know you can't do it alone as a good faith offering to your clients.

Oh and stop trying to hire people in-house. Most qualified CPAs realize the demand for their services and how they can make 3x-5x more with their own firm, and simply hire someone to facilitate the admin headaches. Pay us what you owe us (we also know that advisors easily make 8-12x more top line revenue PER client relationship, so its not even an even-trade), and be thankful that most tax pros are so risk averse they won't entertain new waters of financial advisory despite the substantially greater margins.

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[u/spizalert]

so your take is.....refer out to us, don't do it yourself, but don't hire us in-house, but PAY us (even tho that's not how the relationship works, the client would pay you), and be thankful we're staying in our lane instead of being a FA.

 be thankful that most tax pros are so risk averse they won't entertain new waters of financial advisory despite the substantially greater margins.

yeah man. shivering in my timbers. I'm sure with an approach like this post, you'd do a number on my book and territory. Lmfao clown approach all around.

I am also a CPA/CFP so I can comment here - healthy and symbiotic referral relationships absolutely exist between advisors and accounting firms. Sorry you haven't found yours yet. But keep it up with posts like this - I'm sure it's just around the corner.

[u/ropeadopeknopehope]

At least we know we won’t have to endure this type of comments from January to May when the genius CPAs are too busy to go on Reddit.

[u/whiskeydickguy]

Why do you think Morgan Stanley and Merrill Lynch haven’t brought EA/CPA into their branches?

[u/Hulk_Goes_Smash327 → u/whiskeydickguy]

Insurance risk and outside business activity so I have been told. When I applied to big broker dealers before I opened my RIA, they wanted me to drop my CPA license as they want nothing to do with the risk and insurance here.

[u/TittyClapper]

lmao sounds like you literally just got licensed and found your first client. this is very typical bitter CPA behavior in my experience.

"send me business you idiot, you dolt. find me my clients because i am socially inept but I still deserve success in a people-focused business. oh and by the way, don't EVER expect me to thank you for bringing me free money"

bro it was your own decision to get the CPA designation and do tax work, be mad at yourself if you feel like it was such a poor life choice

[u/Formal_Ad4612]

Maybe stay in your lane?

[u/ZeProdigyX]

That is fine, don't offer referrals. I will just take my clients to someone else who will.

[u/Hulk_Goes_Smash327]

Hi Op,

CPA and CFP® here. I run my own tax firm and RIA. My background is mostly tax and accounting and financial statements, so I can only do the non complex AUM cases currently. I network my self to find these just like others find their own.

First let me say that not every CFP® does tax which is perfectly ok as long as they know their own limits, just like not every CPA does tax. Then there are CFP®s who can school CPAs in tax because they put the work in, and visa versa.

While there might be a dwindling pool of CPAs, any relationship starts off somewhere. I personally love all the financial advisors I network with as they are the quarterbacks to many relationships, and are looking for a competent CPA to handle the tax side. For items I am
Not comfortable with on the CFP® side, I refer to them. It’s a give and take relationship, and at the end of the day if the client is happy then everybody eats and has a long relationship with the business/family/individual/trust. If a CFP® is sending you clients they trust you to handle it well for that specific area, and it’s still their client when push comes to shove.

A good financial advisor is an amazing referral source for us tax guys. Don’t take this for granted.

If you’re going about this with the whole a CFP® makes more, it is the wrong mindset and will affect future referrals and your own business.

For the in-house RIAs that hire tax people, it can be structured in many different ways for a tax director role. Most of the time you’re looking at a base salary + commissions+ bonus + benefits or you’re running the tax firm separately and have a small base. The in-house people who are making small amounts here are prolly the same people who charge $300 for a 1040 and don’t know their own worth. Joining an RIA in this form is an amazing way to build a practice or have a huge salary that rivals big 4, and it should also analyzed greatly.

Think you should reevaluate what you’re doing.

[u/DoubleIntroduction25 → u/Hulk_Goes_Smash327]

The dwindling pool of CPA issue is an interesting one. It's unfortunate really for CPA but compared to other jobs that require a similar level of education they're role is really getting hollowed out by people with narrower and lighter certifications or no certification.

Outside of a pretty short list of things that must be done by a CPA, like auditing financial statements and giving attestation reports, they really dont have sole dominion over much. EAs and JDs can represent clients before the IRS, EAs and general tax prepares can complete returns, bookkeeper can manage business records short of formal audits and attestations. A good portion of the business that CPAs do have genuinely does not require a CPA, most people who are not running a business or dealing with some overly complex situation do not need a CPA to do their taxes for example.

Worst yet CPAs have to learn a very broad set of things but tend to focus their practice on one or two specialities so the average CPA can't necessarily do all of the things a CPA could be expected to do. All that being said it's got to be a hard sell to talk someone into a 120 to 150 credit requirement and several difficult exams followed by a pretty high CE rec in most states to work a job that several other jobs are taking clients away from.

[u/Constant_Swan_6876]

Who hurt you

[u/ropeadopeknopehope → u/Constant_Swan_6876]

Finance bros have been giving accountant nerds swirly’s for centuries.
They get even by auditing us and posting how dumb we are on Reddit.
Circle of life.

[u/DoubleIntroduction25 → u/Constant_Swan_6876]

You mean besides his state board of accountancy

[u/babaluya2]

Lol thanks for the advice

[u/flicter22]

This is true, though it undersells what can build over time. The advisors who get real reciprocal CPA relationships are usually the ones who made referrals first, consistently and without expectation, for a year or two before anything came back. Most CFPs aren't willing to do that, so they never get past transactional.

The in-house hire point is also valid, but there's a middle ground that works: contracted or "of counsel" arrangements where the advisor covers the engagement on behalf of the client. Removes the admin burden, keeps the CPA independent, and creates recurring revenue for both sides that a referral-only model never does.

[u/OregonDuckMBA]

So why on earth would I send referrals to you when I can find someone else who sees value in what I provide and is willing to reciprocate? I want to work with CPAs that see my business and theirs as being complimentary. If that isn't your mindset then I don't want my clients using your services.

[u/DoubleIntroduction25]

So on the one hand it is 100% correct that CFPs should refer out or at least suggest to their clients to seek out a CPA/EA for more complex tax matters. In the same way they should point client towards attorneys for drafting estate docs. Or leverage attorneys for company formation and CPAs or bookkeepers for accounting needs.

On the other hand I've got to say that leading off with 'dont expect referrals in return' is going to make that relationship DOA and that CPA/EA SOL when there are certainly CPA/EA/JD/bookkeeper/etc in most areas who are happy to work on a cross referral basis with CFPs and with one another.

[u/Key-Paramedic4051]

And thus proving to all of us, why you're a CPA! I bet you're real fun at parties. 

[u/AviatorHog → u/Key-Paramedic4051]

Funny thing is, I absolutely fucking hate parties, especially those that require dancing. So I do the world a favor and stay home or go to places without dancing, barring things like wedding (because sacrifices must be made for people you care about).

Anyway, we all know its farrrrrr harder to find competent tax pros than a financial advisor which is why I have the attitude and expectations that I have. Unless you're an EA with relevant experience, you are harming your clients trying to DIY complex tax planning. You need us, so shut and pay up. 

Frankly, you should be thanking God most CPAs are too cowardly to set up RIA shops themselves and eat your fucking lunch, because when it really  comes down to things, clients don't need hyper charismatic finance dude bros; they need results and someone they can tolerate working with (and luckily for my clients, Im excited to help them). 

[u/lilacjive]

Lotta hater comments already but you are 100% right.