CPAs and Estate Planning Attorneys who do not have full insight into their clients’ entire financial circumstances face numerous service, operations, and growth difficulties. These difficulties stem from the complexity of managing the finances of mass affluent and high-net-worth individuals and the challenges that arise from the diversity of their assets, as well as unique family situations.
A mass affluent family may own various liquid and illiquid assets, ranging from businesses to real estate properties, collectibles, and cryptocurrencies, and the value of these assets can change considerably over a short period of time. This complexity necessitates frequent reassessments of their tax exposure and estate plans, which can be challenging for CPAs and attorneys if they don’t have on-demand, complete information about their client’s wealth. Moreover, these individuals might have different financial advisors for different assets, making it difficult to communicate, coordinate, and collaborate with all the financial professionals working with the client.
Blended Families
In addition, managing estate planning for blended families can be complex due to the potential for conflict and competing interests between spouses and stepchildren. Quite often, these relationships require a nuanced understanding of the family dynamics and the financial situation of each family member, which again can be difficult without on-demand access to the full financial picture. And similar challenges arise in situations where surviving spouses inherit the entire estate and make changes after the death of their partner, leading to emotional conflicts within the family.
Family Businesses
Tax and estate planning involving family businesses can also be complicated, especially when some children are involved in the business while others are not. As with blended families, there can be challenges when attempting to determine what is fair for all children. A successful outcome requires a deep understanding of the financial contributions of each child to the business and their respective financial needs. This can be achieved by developing a differentiating compensation structure, but this solution, once again, requires a comprehensive look into the financial information about the business interest and each participating child.
What about grandchildren?
Finally, many clients want to include their grandchildren in their estates. This requires considerations to be made about the financial abilities of the client’s children, and whether or not they can provide for and not exhaust financial assets that are intended for the grandchildren. This makes the division of the estate more complicated and once again requires complete financial information about the family’s financial situation.
These complexities underscore the importance of having a well-thought-out estate plan and communicating effectively with all family members as well as one’s financial professionals.
But achieving this can be challenging without full financial insight.
Enter Strad Pro
Strad Pro is a cloud-based virtual family office application that provides a holistic, all-inclusive perspective on a client’s financial situation. The Strad Pro solution has proved time and again to be extremely beneficial for CPAs and Estate Planning Attorneys, particularly those who may not have a comprehensive understanding of their client’s entire financial circumstances, or a process to communicate and collaborate with the client’s family and other financial professionals.
Here’s how Strad Pro can aid CPAs and estate planning attorneys:
1). Complete insight into client assets and business interests: Strad Pro gives complete insight into client assets, business interests, and liabilities.
2). Highly personalized advice based on real-time circumstances: Strad Pro acts as the financial Hub by placing the financial professional who licenses Strad Pro in the CFO position. This allows for clear insight into changes in a client’s financial situation. With this immediate and on-demand insight, changes can be quickly incorporated into tax and estate planning, ensuring that the plan always reflects the most accurate and up-to-date information.
3). Continuity through unsettling life transitions: Strad Pro provides continuity through unsettling life transitions like cognitive decline, loss of the head of household, and succession to the next generation. This can be especially beneficial in estate planning, where such transitions often necessitate significant changes to the plan.
4). Strengthening client relationships and retaining next-generation heirs: Strad Pro helps in strengthening client relationships by helping you and your team connect with and retain next-generation heirs. With Strad Pro, CPAs, and Estate Planning Attorneys will build stronger, longer-lasting relationships with their clients and their families, ensuring continuity and trust in the tax and estate planning process.
5). Streamlining information gathering: Strad Pro is the simplest asset-gathering tool in the market, saving CPAs and Estate Planning Attorneys time through streamlined information gathering.
6). Unique brand differentiation and competitive advantage: With the Strad Pro virtual family office platform deployed in your tech stack, you immediately provide a unique brand differentiation and competitive advantage over competing CPAs or estate planning attorneys, setting you apart from everyone else in the field.
7). A Virtual Family Office overnight: It is no longer a secret that CPAs who offer family office services realize asset growth and increase in business valuation multiples that approach 5-7x compared to competitors who do not offer the same level of service. A recent Fidelity study shows financial professionals who offer integrated family office services saw an average growth of 23% in assets under management (AUM) over three years. Moreover, the AICPA reports that diversification into high-demand services like family office management can lead to revenue growth rates exceeding 20%. Given that mass affluent and high-net-worth families are projected to transfer $68 trillion in wealth over the next 25 years (Cerulli Associates), there is an increasing demand for comprehensive services that encompass tax, estate planning, and wealth management. By positioning your tax or estate planning firm to meet these complex needs, you’re not only increasing your revenue but also adding immediate tangible value to your practice. With a more extensive service offering at your firm that transitions it to a virtual family office, you will make your practice more valuable. Echelon Partners’ 2020 RIA M&A Deal Report indicates that financial professionals and firms with diversified services have a 30% higher valuation multiple compared to traditional firms.
Expand your firm’s services today by offering integrated virtual family office services. Grow your client and financial professional relationships while solidifying your position as your client’s CFO.
Sign up for your free trial today or schedule a demo with one of our experts.
