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The Win/Win of Adding a
Financial Services Offering
Survey finds that almost half of accountants and tax professionals
offering investment, retirement and estate planning have seen an
increase in revenue in the past 12 months. You could, too.
Accountants and tax professionals who have been in this industry awhile might find their revenue stagnant. The same clients return
at the same times of year needing the same services. By offering financial services alongside your tax firm offerings, you can break
this cycle and boost revenue, fill in gaps when business is slower, improve client retention and expand your client base.
A recent survey of accountants and tax professionals who do and don’t offer financial services, conducted by the research unit of
SourceMedia (publisher of Accounting Today), in partnership with HD Vest, brought to light the revenue opportunities that those not
offering financial services may just be missing.
In this paper, we’ll share how financial services can improve a firm’s business posture and still serve clients—truly a win/win.
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3% 1%
42%
ON THE FRONT LINES
23%
26%
17%
16%
9%
9%
10% 7%
Client satisfactio
5%
11% 4% 7% 10%
3% 5%
10% of a
17%
14%
16%
12% because
Many accountants and tax professionals who responded to the survey said they are reluctant to 11%
offer12%financial
services
perceived conflict of interest, not enough time or lack of expertise. The reality is, though, that many
accountants 16%
and tax 34%
10% 3%7% 7% 6% 9% 8%
professionals are already deeply involved in their clients’ investment and financial planning decisions. Not to mention that these
7%
16%
10% 13%
16%
12%
8% 8% 10%
professionals often have to correct mistakes made by their clients’ financial advisors and provide sound advice based on insight
from the tax returns they prepare.
First-ranked choice
Second-ranked choice
Third-ranked choice
“Most investment decisions have tax consequences and taxes are often overlooked when investors are making their decisions” says
Chad Smith, wealth management strategist at HD Vest Financial Services. “Often the tax professional is left to work with the clients
during tax season, trying to explain what happened and why they are having to pay higher taxes.”
By not offering financial services as a clearly defined client service, accountants and tax professionals may be not only be failing to
get the credit—and revenue—they deserve, but missing the opportunity to better serve their clients. This dilemma was summed up
18%
nicely by survey respondents, who noted that accountants and tax professionals should provide “extra
1% services to current clients to
show our broad range of knowledge” and that “more services equal more client satisfaction.”
46%
3% 1%
BY THE NUMBERS
42%
23%
9%
10% 7%
Client satisfaction/client relationships
5%
23%
42%
9%
35%
So, what do the
numbers
look
for4%accountants
and tax professionalsClient
who’ve
the26%plunge
16%and offer financial services to their
retention taken
17%
9% 11%
26%
16% like
7% 10%
17%
3% 5%
clients? Nearly half of tax professionals that offer
financial services have seen an increase
in revenue in the past 12 months, and
Increased
11%
Improved firm value
12%
14%
10%
11%
17%
12%
14%
16%
12%
Remained the same
almost 40% experienced a more than 10% revenue increase.
First-ranked choice
16%
12%
10%
Second-ranked choice
13%
Increased revenue
7%
8%
10%
REVENUE FROM FINANCIAL SERVICES
First-ranked choice
Third-ranked choice
Q: In the last 12 months, how has your firm’s total gross
revenue from financial planning/wealth management
services changed, if at all?
Second-ranked choice
Q: How much has your
firm’s financial planning/
wealth management
services revenue
increased 5%
in the
past
1%
12 months?
18%
1%
8%
Decreased
Don’t know
Third-ranked choice
35%
28%
46%
17%
46%
46%
46%
46%
35%
11%
30%
Base = 100 (Tax professionals with a financial services offering)
Source: SourceMedia35%
Research, August 2014
11% to 20%
9%
1% to 5%
Increased
Remained the same
Decreased
Don’t know
Don’t know
16%
8% 10%
10% 3% 7%
6% to 10%
8%
Brand strength
34%
16%
8%
21% or more
10% 3%7% 7% 6% 9%
Base = 46 (Tax professionals with a financial services offering, FP revenue
increased in past 12 months)
28%
These numbers help to answer concerns by accountants/tax professionals looking for evidence of the financial benefits of offering
these services, as one respondent noted, “It would have to be a substantial revenue opportunity,” and another respondent said he/
she would need “obvious profitability assurance.”
To help accountants and tax professionals determine revenue opportunities that may be hiding in their clients’ tax returns, HD Vest
17%
has created revenue calculators tied to lines 6, 7 and 32 of clients’ 1040s. At www.hdvest.com/Calculator, you can visualize how
you can better serve your clients and their unmet financial needs while building your financial services business. It’s a tangible way to
start your journey toward expanded services—and revenue.
11%
Don’t know
21% or more
11% to 20%
6% to 10%
1% to 5%
9%
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BUILDING YOUR CAREER, BRAND AND LEGACY
For many businesses, revenue comes with improvements in the firm’s value and reach. Accountants and tax professionals know that
their own growth can fill the business’ coffers. Most firms, at some point, have to consider the value of their business and create a
succession plan. “The more diverse the services and the more satisfied and loyal the client base, the more attractive and sustainable
a business becomes,” says Smith.
Survey respondents that offer financial services consider improved firm value and brand strength to be important issues. By
diversifying and including financial services as part of the business, accountants and tax professionals help ensure the longevity of
their practice and the loyalty and satisfaction of clients.
TOP THREE BENEFITS OF A FINANCIAL SERVICES OFFERING
Q: When it comes to financial services/wealth management, how important are the following issues?
3% 1%
1%
%
%
Client satisfaction/client relationships
5%
Client satisfaction/client relationships
11% 4% 7% 10%
Client retention
9%
10% 7%
17%
10%
%
10%
13%
7%
Increased revenue
11%
12%
Improved
firm14%
value
10% 3% 7%
Brand strength
8%
8%
10%
Increased revenue
First-ranked choice
choice
ce
Improved firm value
Brand strength
34%
%
Client retention
26%
26%
17%
16%
9%
16%
3% 5%
3% 5%
10%
12%
17%
23%
42%
9%
23%
42%
11%
12%
14%
10% 3% 7%
8%
8%
10%
Second-ranked choice
Third-ranked choice
First-ranked choice
Third-ranked choice
Second-ranked choice
Third-ranked choice
Base = 100 (Tax professionals with a financial services offering, don’t know responses excluded)
Source: SourceMedia Research, August 2014
“Envision growing your client relationships by showing them how to start saving for their children’s education and their retirement,”
Smith says. “By recognizing 1040 revelations and communicating the investment planning opportunities to your clients, you’ll soon
be earning more from the 1040 than just a tax preparation fee.”
5% 1%
5% 1%
Being an accountant and tax professional is as much about quantifying your clients’ past year as it is evaluating their future,
according to Smith. “HD Vest equips Advisors with the tools they need to develop their practice and reach their personal growth
goal. We’re ready to help you enhance your practice,” he says.
46%
46%
46%
46%
46%
46%
46%
46%
30% 46%
30%
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METHODOLOGY
In August 2014, SourceMedia Research conducted an online study to learn more about financial services offerings at accounting firms.
In total, 321 tax professionals participated in the study. Respondents were drawn from Accounting Today subscribers.
ABOUT HD VEST
Since its inception in 1983, HD Vest Financial Services® supports an independent network of tax and non-tax professionals who
provide comprehensive financial planning* solutions, including securities, insurance, money management services and banking
solutions. Approximately 4,500 independent contractors manage more than $35 billion in assets for some 1.8 million individuals,
families and small businesses in all 50 states.
ABOUT SOURCEMEDIA RESEARCH
SourceMedia Research provides full custom B2B research solutions for marketers, agencies and other targeting business sectors
such as accounting, banking, payments, mortgage, insurance, HR/employee benefits and wealth management. SourceMedia
Research is a unit of SourceMedia Inc., whose B2B media brands include Accounting Today, Financial Planning, American Banker,
The Bond Buyer and Employee Benefit News.
For more information about HD Vest Financial Services, please visit hdvest.com/taxalpha18 or contact a Business
Development Consultant at (800) 742-7950.
*Subject to appropriate licensing, HD Vest offers different types of accounts and levels of service that can have important implications in terms of the legal rights and
responsibilities that attach to your relationship with HD Vest. Unless you have separately contracted for investment advisory or financial planning services, any analysis
performed is not an investment advisory account or a comprehensive review of all of your financial needs in connection with a financial plan. Not all HD Vest Advisors are
licensed to offer all products or services.
HD Vest Financial Services® and its affiliates (collectively, “HD Vest”) do not provide tax or accounting services. You should consult your tax professional regarding the tax
implications of any investments. HD Vest Advisors are independent contractors affiliated with HD Vest solely for the purpose of conducting securities-related activities. In
addition to the brokerage or investment advisory products or services provided through HD Vest (which you must sign a specific written contract with an HD Vest company
to receive), Advisors may separately provide legal, tax, accounting, audit, payroll or other products or services that are not affiliated in any way with HD Vest. HD Vest does
not endorse or supervise any activities conducted outside of HD Vest, including tax or accounting services.
HD Vest Financial Services® is the holding company for the group of companies providing financial services under the HD Vest name. Securities offered through HD Vest
Investment ServicesSM, Member FINRA/SIPC, Advisory services offered through HD Vest Advisory ServicesSM, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038,
972-870-6000.
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