The right accounting firm relationship isn’t just about the care you receive as a high-net-worth individual. It’s about making the most of every chance to build and preserve your wealth. And here’s the thing: Sticking with an accounting firm that’s no longer the right fit could mean you’re missing opportunities to save hundreds of thousands of dollars in taxes — and no relationship needs that kind of baggage!
It’s smart to take stock of your accounting firm relationship when you hit certain milestones in your wealth journey:
You “leveled up” to a new tax bracket. Whether you’ve recently hit it big in your career, sold a business or come into a sizeable inheritance, a significant increase in wealth calls for a specialist. High-net-worth tax planning requires expertise in complex issues such as planning for the alternative minimum tax (AMT), exercising stock options and optimizing your gift tax exclusion.
It’s time to transfer wealth. If you start talking trusts and your CPA is shifting uncomfortably in their seat, that’s a sign they’re not up to the task. Planning for an effective transfer of wealth is critical now, with the sunset of the historically high lifetime estate tax exclusion right around the corner in 2026, when it will revert back to its baseline of $5 million (adjusted for inflation).
Your financial life’s gotten complicated. Maybe you bought some real estate or inherited an equity stake in a company. Perhaps you’re setting up a pass-through entity for a new business endeavor or investing in a foreign company. If your current accountant doesn’t have the resources to support these complex endeavors, it’s time to find a firm with a broader skill set.
You’re becoming more charitably inclined. There are many different avenues for charitable giving, from donor-advised funds to private foundations. Each option has different tax implications. You don’t need cookie-cutter advice. You need a philanthropic approach that’s just right for your situation — and an accountant who is able and willing to help you define that approach.
You know the saying, “It’s not you, it’s me.” Well, sometimes it really is them:
The relationship feels one-sided. It’s not a good sign if you feel like you have to chase down your accountant. Not only should they pick up the phone when you call and respond quickly to your emails, they should be calling and texting you throughout the year to learn what’s new and how they can help you reach your goals.
Your CPA isn’t your go-to. Setting up a dynasty trust? Looking for a divorce attorney? Performing an estate valuation? Your CPA should be your first call whenever you’re making big decisions. If they’re not at the top of your list — or if they don’t help you get the answers you need — then it’s time to move on.
You’ve grown apart. Do you hesitate to pick up the phone and call or text your CPA? You shouldn’t. If you don’t keep in touch with your accountant — maybe because you don’t feel you can talk to them — then how will they be able to deliver the value you need?
If at all possible, meet with each prospective accountant face-to-face. After this meeting, you should know in your gut if they seem like “the one.” Could you see yourself developing a long-term business relationship with this person? Do you trust them to always have your best interests at heart?
When you interview potential CPA candidates, you’ll want a few conversation starters in your back pocket:
Do you work with other clients like me? Tell me how you’ve helped them. If the firm doesn’t have a team that specializes in tax planning for high-net-worth individuals, they (and more importantly, you) could miss tax benefits that are specific to your level of wealth.
Tell me about some unique ways you’ve saved your clients taxes. If you’re looking for an accounting firm that goes beyond conventional tax planning, probe the accountant on their more innovative strategies. Be frank about your risk tolerance so you can have a productive discussion about strategies that match your risk level.
What new developments could affect my tax situation? How they answer this question will reveal whether they’re in the loop on new regulations and tax credits. If they aren’t, it’s best to move on to the next candidate. Many tax credits and deductions are limited-time opportunities, and missing out on them can be like throwing money out the window.
What’s your fee schedule? You probably already know that the right tax advisor will deliver value many times greater than what you pay in fees. At the same time, if high fees are going to cause you stress, then that will just put negative pressure on the relationship. Tackle the price issue head-on by requesting the fee schedule, and be up-front about what you can afford and what you expect in return.
How will you make this transition easy for me? Some people put off changing accountants because they assume it will be painful and time-consuming. Actually, most midsized and larger accounting firms have secure client portals that make it easy to upload documentation. If your documents are already saved digitally, the process might be as simple as signing a release form.
Will you communicate directly with my other legal and financial advisors? Your accountant should coordinate and work collaboratively with your other trusted advisors so that all aspects of your financial planning are integrated and aligned with your overall objectives.
As exciting as a new relationship can be, it takes work to make sure it lives up to everyone’s expectations. With that in mind:
Make sure you’ve signed the proper releases so that your new accountant can receive your records.
Inform your new CPA about new investments, properties, inheritances and other life changes as they come up.
Bring your adult children and grandchildren along so they can start developing relationships with members of the accounting team.
Send your old accountant a heartfelt thanks — and maybe a box of candy!
Staying in an unfulfilling CPA firm relationship can cost you hundreds of thousands in tax-saving opportunities. If you’re seeing signs that you’ve outgrown your tax advisor, it’s time to explore other options. Reach out to our high-net-worth tax specialists today to learn more about how proactive tax planning can transform your wealth building strategy.
