So often I hear folks discussing the advice they receive from their CPA regarding investments. While CPAs perform a great service as accountants and bookkeepers, investment and financial advice is an area that should be left to financial advisors. Just as your dentist shouldn’t be your doctor, and vice versa, getting advice from the professional with expertise in the appropriate area is vital, so relying on your CPA to assist you in reaching your financial goals may be a mistake.
Now I am sure I have upset a few folks reading this, and I should clarify a couple things. There are some CPAs who hold themselves out as financial advisors. They have credentialing and/or experience as an advisor, which is a completely different story. I have several colleagues that fall into this category and would feel very comfortable recommending them. I am CFP® who prepares taxes, so I suppose the tables could be turned. Of course, I have extensive experience and years of tax preparation under my belt, so again it’s about finding the right match. I wouldn’t want an inexperienced advisor preparing my taxes either!
The bottom line is to seek the appropriate professional. As a fee-only advisor who performs comprehensive financial planning, I find it impossible to know everything…. although I have my wife and kids fooled. There is just too much to know, but I try. My clients know when I am stumped I will reach out for answers from several sources. Even as a holistic advisor, I don’t over step my boundaries. I may discuss legal definitions, but I don’t give legal advice. I may discuss business tax returns, but I don’t prep business tax returns. I will refer those returns out to CPAs who specialize in that area.
The next time your CPA doles out financial advice you may want to consider the source. Is your CPA qualified to give financial advice? Are there commissions or financial incentives for the CPA in the advice you are receiving? Financial advice should come from an unbiased source, such as a fee-only CFP®. If you are in the market for a comprehensive financial advisor, who delivers advice in the client’s best interest, you may want to check out the Alliance of Cambridge Advisors.
