Survey: Wealth Advisors Most Optimistic; CPAs the Least

As we prepare to release our 5th annual CPA/Wealth Advisor Confidence Survey™  to the media and general public, this much is clear. Financial advisors of all stripes have never been busier. But tons of billable hours and ample referrals don’t necessarily translate into satisfaction.

First the good news: Four in five survey respondents (81%) told us they expect their firms to have positive revenue grow in 2021. That’s up from 75 percent who felt this buoyant at this time a year ago. Further, nearly two in five respondents (37%) expect to see double-digit revenue growth in 2021 (i.e. 10% or greater)--up from just one in four firms (28%) before the onset of the pandemic.

But when you start looking at the types of practices each of the 300-plus respondents run, the differences in growth expectations are striking. For instance, nearly all (98%) CFP/Wealth advisors survey expect to see topline revenue growth in 2021, compared to just 75 percent of CPAs and 71 percent of Estate Attorneys and Planned Giving Officers.

Further, Wealth Advisors were far more likely than other types of advisors to anticipate double-digit revenue growth over the next 12 months.

Our data indicates three in five Wealth Advisors (60%) expect to grow by 10-percent or more in 2021, compared to two in five (40%) Estate Attorneys/Planned Giving officers and less than one in four (23%) CPAs.

Expecting Double-Digit Revenue Growth in 2021

Wealth Managers ***************************************************60% Estate Planners/Giving  ************************40% CPAs ***********************23%

CPA Trendlines, HB Publishing & Marketing Company, LLC; Investments & Wealth Institute, and The Financial Awareness Foundation, 2021. All rights reserved

“Wealth Managers, by their very nature, tend to be more optimistic than attorneys and CPAs,” observed Randy Hubschmidt, Partner, Fortis Family Wealth (Valley Forge, PA). “Attorneys are largely trained how to keep others (counterparties to contracts) from doing things. Similarly, CPAs tend to be backwards looking – they report history whether that is financial statement history or tax reporting history.” By contrast, Hubschmidt said wealth managers tend to be trained in finance, which is a forward-looking discipline and “less worried about the past.”

To a certain extent, CPA Karen Koch, Senior Director, Source Advisors (Louisville, KY) agreed. “Whether a CPA, wealth advisor, or attorney, we all struggle with how to grow the business even though our clients continually ask for more services.  We are uncertain how to incorporate client needs to a revenue stream.” According to Koch, the future growth of accounting firms is likely going to include strategic relationships with vendors that can offer expertise not typically found within a professional services firm. “We need to assure our clients we are the trusted advisor that knows how to deliver fully defensible services with a team approach,” Koch added. 

While wealth advisors have been the most confident advisors throughout the five-year history of our survey, estate planners showed the largest uptick in optimism over the past year. Two in five estate planners/giving officers (40%) expect to grow their revenue by double-digits in 2021 To put that into perspective, less than three in 10 estate planners (29%) expected double-digit growth at this time a year ago.

Wakeup Call

Estate Planner Randy Fox, Founder, Two Hawks Consulting (Skokie, IL) told me recently that potential tax upheaval and likely lowering of the estate tax exemption is driving more clients to planners’ doors. Fox also said COVID-19 woke up a lot of people to the fragility of life. “When we see 40-year-old friends and 30-year-old coworkers dying in the hospital, there’s a heightened sense of one’s own mortality,” related Fox. “Everyone knows someone who died unexpectedly or was in crisis mode during the darkest days of the pandemic. It’s especially sad to see young and middle-aged adults gravely ill in the hospital without having health care powers of attorney identified. Talk about a huge wakeup call.”

Estate planner Hyman Darling, Partner, Bacon Wilson, PC (Springfield, MA) noted that more people than ever are aging in place and are concerned about their future financial situations. He also said parents are taking the initiative to plan for long term care, estate taxes and addressing the issue of possibly “outliving” their savings. “Financial planning companies are adding staff and developing new products to assist with these issues, thus more planners will be marketing these strategies to the clients.”

Kyle Walters, CIMA has the unique perspective of a wealth advisor who has merge with several regional accounting firms to form Dallas-based L&H CPAs. According to Walters, most CPAs are analytical numbers people who have been drawn to their profession because they like the sense of balance, order and control it demands (i.e., Debits = Credits).

However, with that mindset, Walters said it’s harder for CPAs than others to get inside their heads and modify their habits or behaviors. “There’s no standard, reg or best practice to follow when it comes to navigating the ‘gray areas’ in a client’s financial life. Instead of one or two tax deadlines per year, it’s an ongoing process in which they clients need their CPA all year round. Their expert advice—not their ability to fill out rows and columns for the government—is what clients increasingly value,” added Walters.

That’s something that wealth advisors and estate planners long ago figured out.

*** Ping me any time if you’d like a copy of the 2021 survey findings or would like us to present the findings to your firm or professional organization.

Conclusion

Our 2021 survey is a joint initiative of CPA Trendlines, Elite Resource Team, The Financial Awareness Foundation, the Investments & Wealth Institute and HB Publishing & Marketing Company. A total of 309 financial advisors from throughout North America took part in a 25-question online survey during the first quarter of 2021. Respondents received no financial or in-kind incentives to complete the survey other than a promise to receive a pre-publication copy of the results. Sincere thanks to my co-authors Rick Telberg (CPA Trendlines) and Valentino Sabuco (The Financial Awareness Foundation).

What’s your take? I’d like to hear from you.

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