do you know your client’s total picture?

diagrambonus case study: the cpa who saved a family’s net worth.

by anthony glomski

i realize that not all of your clients are entrepreneurs. but, consider this: 90 percent of all the wealth in the u.s. is owned by business owners and 10 percent is inherited. nearly every cpa i know works with business owners and their families. with all the changes impacting the cpa profession today, it’s imperative that you get comfortable changing lanes and adopt a more consultative role with your clients.

more: what level of advice do entrepreneurs need? | three approaches to investment consulting | the role of the personal cfo | three components of collaborative wealth management | 2022世界杯32强赛程表时间
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if you’re a cpa and you’re not actively overseeing all the people helping your clients with their financial lives, then you’re missing a big opportunity with your practice. you’re overlooking the opportunity to make a massive impact on the lives of your best clients, their families and the causes they care about.

first evaluate the amount of complexity in your client’s life and where they are on the pyramid above, starting with our first worksheet.

worksheet 1: evaluate the complexity of your client’s financial life.

no = 0 yes = 5
is your client a successful entrepreneur or someone with a complex financial situation (e.g., approaching or experienced a liquidity event, early employee with rsus or isos, etc.)?
are they interested in ways to lower their tax bill?
will they be doing extensive overseas travel?
do they have a living ex-spouse?
do they have children from more than one marriage?
do they have a special needs child or other child who causes them concern?
would they be helped if they knew current amount needed to maintain their lifestyle?
do they have multiple entities?
do they have a solution to buy them out of the business if something happens to them?
is their current net worth greater than $10 million?
do they have charitable intent?
do they write lots of checks to charities and nfp organizations throughout the year?
are they a candidate for a donor advised fund or private foundation?
do they have or should they have business succession concerns?
do they own more than one home?
are they helping with college or graduate school tuition?
is private aviation, concierge medicine or access to other lifestyle services part of their world or conversations?
are they a potential target to unscrupulous folks, i.e., does their success put them in the public eye by press or otherwise in the world or in their community?
are they potentially subject to some estate tax exposure with the current limits or when the current limits change?
are they planning to sell or exit their business at any point or take other steps to create liquidity?
have they recently (or will they soon) inherit a substantial amount of money or property?
could they benefit from buy-sell agreement or a review of the existing agreement (yes if more than one owner)?

source, ag asset advisory, 2019-2020

rating your client’s score:

0 – 4              investment advisor may be sufficient

5 – 20            financial advisor may be sufficient

20 – 50          true wealth management solution should be explored

50 – 100+      virtual family office should be evaluated


next, evaluate your client’s advisor(s) and see where they are on the pyramid.

worksheet 2: evaluate your client’s advisors.

no = 0 yes = 5
have you created a basic financial plan?
have you provided advice around mortgages, major purchases, etc.?
do you perform tax-loss harvesting, and if so, do you take into account other accounts that you don’t manage?
have you presented other tax planning solutions?
can you build a “tax wrapper” around a portfolio?
have you created a current cash flow model?
have you created a cash management plan that has been stress tested for unexpected short and near-term liquidity needs? (this is especially relevant during covid-19 and other “black swan” events.)
have you created an asset protection plan?
have you taken steps to reduce estate tax exposure?
have you worked with professionals to get the necessary trusts drafted? have they been reviewed in the past three years?
is a charitable giving plan currently in place?
have you designed custom pension plan solutions beyond the typical defined benefit and 401(k) plans, such as a focus defined benefit plan?
have you worked (with this client or others) to create a private foundation?
have you provided pre-sale business planning?
have you coordinated a team to help with the sale of a client’s business?
do you have a team member specialized in covering artwork, exotic cars, jewelry or other collectibles worth six or seven figures?
do you work with them to annually review changes?
has a stress test been performed to confirm all assets held personally and in trusts are adequately covered by an umbrella?
do you have a process to address needs such as private aviation or concierge medicine?
do you have a process to address needs such as private aviation or concierge medicine?

source, ag asset advisory, 2019-2020

based on the score, your client may be working with:

0  – 20        investment advisor

20 – 45       financial advisor

45 – 70       true wealth manager

70 – 100+   virtual family office model

if the client, based on the complexity in their life, is much higher up the pyramid than their advisor, then you have identified a disconnect. if so, you have two very important choices to make. either (a) you as the cpa should step up to fulfill the role of trusted advisor or (b) you work closely with a strategic partner who can step up to fulfill that role.

if you choose to work with strategic partners, make sure you ask questions like those on our final worksheet of every candidate on your short list:

worksheet 3: key questions to ask potential strategic partners



are you a fiduciary?
how do you get paid?
do you get paid directly by the client or do you get a commission on investment products you select?
do you have any revenue-sharing on investment products you select?
do you get any 12(b)-1 (marketing/distribution) fees on any investment products?
what are the fees going forward, once the portfolio is built?
what are the underlying fees?
what are additional commission and transaction charges?
what’s the total cost – all in – for that portfolio?
can you give me a comprehensive case study about the steps you took to help a client with asset protection?
tell me about five (or more) different ways you help a client with tax mitigation.
tell me about the various solutions you access to enhance a client’s charitable giving plan.
what are the steps you take to optimize wealth transfer for a client? how do you involve the family in the discussion? what steps do you take to confirm the current plan will get the results the client is trying to achieve?
what is your ongoing systemic process for ensuring clients are being covered with respect to asset protection, tax mitigation, wealth transfer and charitable giving?

source, ag asset advisory, 2019-2020

case study: the cpa who saved a family’s net worth

i know many of you care deeply about your clients. i’ve witnessed it firsthand. like some of you, i started my career as an auditor. while working at kpmg, i became disillusioned with my life – there was a void. it was great to work with so many smart and gifted people, but the product we worked so hard to perfect – an audit opinion – never seemed to have a meaningful purpose in people’s lives. i know our work was critical for companies, investors and shareholders, but i was just showing up for work and doing my job. the emotional side of my brain wasn’t fulfilled and i knew i needed a stronger connection to my work. that’s why i like work closely with entrepreneurs. i get to see tangible results for them, their families and the causes they care about – and their ability make an impact on the world by serving as their guide.

the same is true of the cpas with whom i am close. i find they have a burning desire to help and to guide. it’s not about doing math or pushing paper. i often share this story, and have altered some details to protect people’s identities.

edgar and edna are a couple who spent most of their working lives involved with a family business that manufactured tires. the business served them well and enabled them to build a comfortable lifestyle for themselves and their children. the company was publicly traded. thanks to its stock price and a healthy dividend payout, everyone in the family believed the business was the best place to keep their money. in fact, many of the company’s board meetings consisted of nothing more than lectures about why family members should not be selling their stock. “we do not sell our stock! we do not sell our stock!” the family patriarch would repeatedly chant while banging his fist on the table.

edgar and edna’s trusted guide, connie, was a cpa who strongly disagreed with the board’s philosophy. she knew how risky it was for edgar and edna to have over 95 percent of their net worth concentrated in just one stock – the family company. connie advised them over a dozen times to diversify their holdings over the years until edgar and edna finally agreed to start selling some of the family company stock. this decision made for some uncomfortable holiday gatherings with the extended family, but it proved to be a wise move.

as industry conditions changed, the family company couldn’t adapt quickly enough and its stock price eventually fell to $1 per share and ultimately became worthless. edgar and edna managed to liquidate most of their holding at the advice of their guide and preserved their lifestyle. their relatives were not so lucky.

nobody can predict what any stock is going to do today, tomorrow or a year from now. but, as a trusted advisor, you absolutely can identify risk and exposure that can completely derail and destroy somebody’s life. none of the couple’s other advisors were willing to point this risk exposure out to them and this reticence (or ignorance) almost had devasting consequences for the family.

it’s no surprise that 90 percent of business owners say their cpa is their most trusted advisor (source: aes nation). i know you want to help people. the world has evolved and many of your clients with complex lives have a significant gap in their financial plan. you can be the bridge to closing that gap. doing so is a win for your clients and a win for your practice because it allows you to help clients in a very meaningful way.


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