Ultra-high net worth (UHNW) families, with their intricate financial needs, are often underserved by traditional wealth managers. Despite their significant wealth, many UHNW clients have glaring gaps in their financial plans, particularly in estate and tax planning.
According to Cerulli research, these services are among the fastest growing in terms of demand among the wealthy. For RIAs, this presents both a challenge and an opportunity. Those who can address the gaps in clients’ plans will gain a competitive edge.
The key to doing so? Partnering with CPAs. By combining their expertise, RIAs and CPAs can deliver holistic, value-driven solutions that meet the sophisticated needs of UHNW clients.
Hungry For Specialized Solutions
UHNW clients, including business owners with net worths exceeding $25 million, are increasingly seeking personalized and sophisticated financial strategies that go above and beyond investment management. However, many RIAs struggle to provide the depth of expertise required.
An Accenture study revealed that an astonishing 90% of clients with $10 million or more in personal wealth feel that the advice they receive is “too generic,” a sentiment that is particularly pronounced among business owners. This disconnect highlights the need for advisors to expand their service offerings to meet the demands of UHNW clients.
CPAs are uniquely positioned to fill this void. As trusted advisors to UHNW clients, CPAs often have deep insight into their clients’ financial lives, including complex tax situations such as intertwined personal and business finances. By partnering with CPAs, RIAs can enhance their value proposition, offering clients a seamless blend of investment management and advanced tax and estate planning strategies.
By partnering with CPAs, RIAs can enhance their value proposition.
This collaboration strengthens client relationships by demonstrating a commitment to holistic wealth management and an evaluation of their entire financial picture — particularly as competition increases to attract, secure and satisfy UHNW clients.
Abundant Synergies
The partnership between RIAs and CPAs is a natural fit. CPAs bring specialized knowledge in tax compliance, estate planning and business advisory services, while RIAs excel in investment management and long-term financial planning. Together, they can provide UHNW clients with a comprehensive suite of services that address every aspect of their financial lives.
For CPAs, this collaboration offers an opportunity to deliver greater value to their clients without expanding their own service offerings. Many CPAs lack the capacity to engage in comprehensive financial planning, but by partnering with RIAs, they can help ensure their clients receive the sophisticated strategies needed to preserve and grow their wealth. This is particularly important for family-owned businesses, where CPAs often serve as de facto chief financial officers, overseeing complex financial structures and intergenerational wealth transfer plans.
The Business Case For Collaboration
The benefits of an RIA-CPA partnership extend beyond enhanced UHNW client satisfaction. Fidelity research highlights that while only one in five advisors are offering holistic planning services, those that do achieve 67% higher growth in terms of the number of clients added. By collaborating with CPAs, RIAs can expand their service offerings without the burden of building these capabilities in-house, enabling them to scale their practices more efficiently.
These partnerships also create new revenue streams for both parties. For RIAs, the ability to offer tax and estate planning services can differentiate them. On the flip side of the coin, CPAs have an opportunity to deepen existing client relationships while generating additional income through shared planning engagements.
Stronger Intergenerational Planning
Another significant advantage of RIA-CPA partnerships is their ability to enhance intergenerational wealth planning. As UHNW families prepare to pass their wealth to the next generation, they require strategies that go beyond traditional estate planning. This includes promoting financial literacy among younger heirs, ensuring a smooth transition of family businesses while preserving family legacies.
A significant advantage of RIA-CPA partnerships is their ability to enhance intergenerational wealth planning.
By working in conjunction, teams can develop tailored solutions that address these complex needs. For example, they can create educational programs for younger family members, establish family governance structures and implement tax-efficient wealth transfer strategies. These efforts can help to preserve generational wealth, foster stronger family relationships and create a shared sense of purpose to extend legacies.
John C. Pastore, Jr. is Executive Vice President at RIA and financial planning firm Integrated Partners, and Homer Smith is Executive Director at Konvergent, an Integrated Partners family office.
