Podcast: Play in new window | Download

Welcome back to another episode of Quantum Growth for Financial Advisors!

In this episode, Jon Kuttin welcomes back Joe Licciardi, Managing Director of Torchpoint Advisors, for the third and final installment of their three-part series. After a big-picture look at the convergence of wealth management and accounting in part one and an accounting-firm growth playbook in part two, this episode turns to the wealth management side: how financial advisors can bring tax and accounting services to their clients and deliver a true family office experience.

Joe explains that five years ago, sitting in the tax meeting was a way for an advisor to stand out. Today it has become the new standard, and advisors who don’t offer it risk being left behind. Jon adds that even as AI reshapes both industries, the need for personal relationships and advice at the higher end of the market isn’t going away, and advisors will keep needing to justify their fees through ancillary services and an integrated advice model. He also shares that at a recent conference of roughly 100 high-end advisors, the smallest managing $2 billion in assets, at least 50% of the time the number one question he heard was how to bring accounting services into a wealth management business.

Joe frames the options as a partnership ladder: referral, joint venture, and investment, with build and buy both grouped under investment. Each step up the ladder brings more control, more integration, and more shared economics, but also more commitment. The referral is the most common and the easiest to start, but with no economics for either side it rarely becomes anyone’s priority, especially during tax season, and the advisor has no control over whether proactive planning actually happens. Jon points out the hidden risk: when a client paying $10,000 to $40,000 a year is used to instant callbacks and proactive meetings, a referral to a busy accountant creates a mismatch of expectations, and if the CPA doesn’t follow through, the advisor becomes the problem.

In a joint venture, the advisor’s team works inside the CPA firm as its wealth arm, typically under a revenue share, with no ownership on either side. Joe stresses getting the terms in writing up front: who owns the client relationship, how revenue is split, who services what, and what happens if a partner retires or the firm sells. It should be a two-way street, and Joe warns that a lopsided flow of referrals, say 70-30, is often where these relationships start to fail. Jon adds an important compliance note: depending on whether you’re a broker-dealer or an RIA, accepting fees back for accounting services without disclosure can be tricky, so talk to your compliance team first.

At the top of the ladder is investment, where tax and wealth live in the same business: one plan, one client experience, and one set of economics. Joe walks through build versus buy. Building is slower and takes less capital and lets you shape the culture, but CPAs are scarce and recruiting is a real bottleneck. Buying gets you a client base, a team, and recurring revenue on day one, but it takes capital and real integration work, which Joe calls “a whole other beast.” His diligence checklist includes client retention, how dependent the firm is on the seller, whether staff will stay, and what the operations and tech stack look like, along with structure questions like rollover equity, a seller note, an earn-out, and the transition period.

Jon is candid about his own experience: he has acquired accounting firms, and it’s hard. Most accounting firms already have human capital issues and more work than they can handle, so referring your most valuable clients to a firm with capacity problems can defeat the purpose of adding the service in the first place. His “flywheel” thesis for buying was both to serve existing clients better and to extract wealth management clients from the accounting firm, and he admits he’s in the period of asking whether it was the right call. He also floats a cleaner alternative: recruiting a CPA to come in with no clients, so they can focus entirely on building the accounting service. His Reese’s peanut butter cupanalogy sums it up: chocolate and peanut butter together is delicious, but it’s harder than you’d believe, so proceed with caution.

Joe closes with a few guardrails. If you hire or buy a compliance preparer and expect a planner, you’ll bury them in returns and the planning will never happen, so the people you bring in need the same goals and ambition you have. He recommends matching the structure to the goal and to your capacity: start with a referral to test the waters, move to a joint venture when you have a strong partner and aligned incentives, and move to investment when tax is core to your value proposition and you have the capital to integrate. Drawing on his investment banking background, he compares that integration work to the operating partners and playbooks private equity firms use, which most first-time acquirers don’t have.

Whether you’re a financial advisor deciding how to add tax services, an RIA weighing an acquisition, or an accountant considering a wealth partnership, this episode offers a clear framework for choosing the right level of commitment, and a reminder that where the industry is headed, clients will expect to walk through one front door and get both.

Listen in to learn:

  • Why offering tax services has shifted from a differentiator to the new standard for financial advisors
  • Why Jon heard “how are you bringing accounting in-house?” as the top question from advisors managing $2 billion or more
  • Joe’s partnership ladder for combining tax and wealth: referral, joint venture, and investment
  • Why referral relationships often fall short: no economics, no priority during tax season, and no control over the client experience
  • How a poor handoff to an accountant can leave the advisor holding the relationship risk
  • What belongs in a joint venture agreement, including client ownership, revenue split, servicing, and what happens if a partner retires or the firm sells
  • Why lopsided referrals, such as a 70-30 split, can break a joint venture, and why to involve compliance early
  • The tradeoffs of building versus buying: slower and capital-light versus recurring revenue on day one with heavy integration work
  • The diligence and deal-structure questions that matter when buying an accounting firm, from client retention and seller dependence to rollover equity, seller notes, and earn-outs
  • Jon’s candid lessons from acquiring accounting firms, including why the average accounting firm has capacity and talent issues
  • How to match the structure to the goal and your capacity, and why a compliance preparer is not the same as a planner

Connect with Jon Kuttin and Kuttin Consulting Group: