Meeting the Financial Planning Challenges of the Future: Top Financial Planners Discuss Strategies for Retirement, Health Care Costs, and Competing with Robo-Advisers

By Vien, Courtney L. | Journal of Accountancy, September 2015 | Go to article overview

Meeting the Financial Planning Challenges of the Future: Top Financial Planners Discuss Strategies for Retirement, Health Care Costs, and Competing with Robo-Advisers


Vien, Courtney L., Journal of Accountancy


To be successful today, CPA personal financial planners must be prepared for many challenges. Increased longevity and rising health care costs have made the creation of strong retirement plans both trickier and more essential. Demand for financial planning services is growing at the same time many advisers themselves are nearing retirement with too few young CPAs to succeed them. And the growing sophistication of robo-advisers has created pricing pressure.

To gain insight into the creative strategies and the interpersonal finesse financial planners have used to meet these challenges, the JofA spoke with four leading CPAs in the specialty. They shared their thoughts and their firms' methods for coping with lengthy retirements, health care costs, clients with dementia, succession planning, and the rise of robo-advisers. The participants included Jean-Luc Bourdon, CPA/PFS, principal and wealth management practitioner, BrightPath Wealth Planning LLC; Michael Goodman, CPA/PFS, president and financial planner/investment adviser, Wealthstream Advisors Inc.; Lori Luck, CPA/PFS, president/shareholder and financial planner, CLS Financial Advisors Inc.; and James Shambo, CPA/PFS, president, Lifetime Planning Concepts Inc. An edited version of their discussion follows.

Robo-advisers are becoming more prevalent--Schwab has even launched a no-fee one. How big a threat are robo-advisers to PFP firms?

Goodman: I do think that the robo-advisers have created pricing pressure in this industry. There's no doubt about it. Clients are generally more sensitive to fees than they have been in the past. You definitely need to make sure that you give your clients value for the fees that they pay.

Bourdon: I find it interesting that CPAs have already seen a similar situation with consumer tax software like TurboTax.

What this did is pushed CPAs away from transactional relationships and towards deeper relationships with their clients. Personal financial planning integrates various aspects of clients' lives: tax, estate planning, retirement, investments, risk management, education planning, and so forth. Robo-advisers are limited to automating some aspects of investment management and simply can't provide personalized integrative planning.

Shambo: CPAs have done personal financial planning for over 100 years--we just haven't called it that for that long. And we have these deep roots and relationships with clients, which is something that a lot of people don't realize. And you cannot replace a relationship with a robo-adviser.

During the recession in 2008, a lot of CPA financial advisers didn't wait for the clients to call them. They were calling every client as soon as they heard about the downturn to find out if they were handling it OK. Clients are not going to get those calls from a robo-adviser, and they're not going to get the handholding they may need during certain life events. I've had clients cry in my office. It's not unusual for that to happen in really stressful times. Relationship is a key issue here, and developing, fostering, and nurturing that relationship is the best way you can protect yourself against this new technology.

That said, firms should consider cultivating relationships with young clients who use robo-advisers, to act as their sounding board and to assist them when they're experiencing life-changing events. By being on the Millennials' radar screen when they are building portfolios, firms will likely be the first adviser the Millennial will consider when issues arise that require one-on-one attention. If I was starting a practice today, I would put integrating robo-advisers with firm-integrated solutions at the top of my list of new services.

With longevity increasing, many Americans now fear that they'll outlive their savings. What are some strategies your firm uses to help ensure your clients won't run out of money during retirement? …

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