A CPA explains the difference between CPAs and financial advisors. CPAs handle taxes and accounting; advisors create comprehensive financial plans based on your goals. The best approach pairs both professionals together, with regular meetings to adjust for changing conditions.
The CPA versus the financial advisor. What are your expectations of service when dealing with one or the other? This recently came up and we certainly, we get it. We field a lot of questions that are generated because a client met with a financial advisor and then they're asking us some stuff. So a couple things to note. CPAs, I mean, that could relate to a variety of services. You have CPAs who do audits. You have CPAs who maybe focus on CFO services. You have some who maybe do accounting, some do tax, or maybe have like an accounting firm like ours that kind of does all of those. But when it comes from the CPA side, in context to where is their service different from the financial advisor, usually People are referring to tax situations. So a CPA will be able to tell you, or should be telling you, the tax consequence of the financial plan that the financial advisor is suggesting. We do get questions though sometimes from clients who meet with, in my mind, A CPA. less than competent financial advisors where they're asking us as the CPAs to tell them as the financial advisor what plan the client should be on. Look, I'm licensed as a financial advisor, so I can tell you based on the tests, the financial advisor should know that information to properly provide a plan for you if you're meeting with a financial advisor. But ultimately, that, that's the general gist. You, you can expect them, a CPA, to be able to say, well, here's the tax consequence of what they're proposing. And sometimes there's dialogue back and forth, uh, because it is possible financial advisor doesn't have all the information or didn't take the time to ask it, and the CPA already knows it. And so maybe they collaborate a little bit. It's actually one of the reasons why I have a financial advisor that we refer our clients to, because it's easy for us to collaborate. And because I'm licensed, I'm technically part of their brokerage. So it's really easy for us to get the right plan for the client. When you meet with a financial advisor, a good one is going to ask you a lot of questions that may seem overwhelming, like, oh my gosh, why do I have to answer all these questions? It's so that they can give you a proper plan. I mean, they're taking in— they should be taking into consideration all the financial aspects of your life and what you're hoping to do for the future so that then they can put that all together and then formulate a plan. So a good one's going to give you a plan. There are people out there who call themselves financial advisors but really are product pushers, and they just sell you things like an insurance product, and that's their only tool. That's not a financial advisor. A financial advisor has access to the multitude of investment opportunities out there so that they can find the investments that fit your plan. The plan comes first. Investments and things like insurance as a— those types of things become the selection based on the plan. It's not the other way around. And then once you Have the initial plan set up. You can expect with a financial advisor to have regular— and that's up to you and them, you need to work that out— some frequency in which you're meeting to go over the plan, to go over the results, to see how things are going. Because like, for example, right now, inflationary period, good financial advisors are making adjustments to the plans because The current economy requires it. That's why meeting frequently at some regular interval with your financial advisor is important. So that's kind of— hopefully that breaks it down, difference between CPA and financial advisor. And yeah, glad we could answer that question. Remember, profit is a choice. Have the courage and wisdom to choose it.
