How Can RIAs Become Accounting Firm Transition Solutions?

One of the biggest deal killers for a CPA firm looking to acquire or merge in another practice is the quality and volume of their 1040 clients. Firms do not want to buy 1040 heavy practices unless they are very high fee returns. The RIAs though do have an interest in acquiring this market.

The Basic Overview

RIAs create their wealth by managing assets. There are different fee structures to manage portfolios, but on average the fee is 1%. While the CPAs may not have a strong interest in the 1040s, the RIAs see them as a breakeven proposition that represent a pipeline of new assets to manage. Even just getting a percentage of the 1040 clients to move their assets to them to manage can be a very profitable transaction.

There Are Some Nuances

One is the issue of assurance work. Any audit, review, or compilation is considered assurance work in most states. A non-CPA cannot own an accounting practice that conducts assurance work. They can do the accounting and taxes. We can discuss utilizing RIAs to be an outlet for a firm to transition their 1040 work or their entire firm. There are ways to address transitioning the assurance work as well.

We Can Help RIAs Grow

Let us conduct a search for your organization to identify potential accounting firms to acquire or merge into you. The opportunity is not just limited to 1040s. The business clients of these firms are always selling. It is part of the natural lifecycle. When they sell their businesses, they monetize large sums of cash that will need to be invested.