MutualFundWire.com: PPC Training CPAs to Implement Planning, Allies With Datalynx
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Tuesday, August 3, 1999

PPC Training CPAs to Implement Planning, Allies With Datalynx


The following article is part of the MutualFundWire.com's special on location coverage of the Datalynx Discover '99 Conference.

Fort Worth-based Practitioners Publishing Company, a wholly-owned subsidiary of Thomson Financial, has begun offering a package of products and services intended to register CPAs as Investment Advisors, including consulting services, software and a financial planning resource guide. The company has also formed an alliance with Datalynx, offering the Denver company's custody and trading platform to clients using its new services.

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    • One of the main reasons PPC chose Datalynx, according to PPC, is Datalynx' independence. Unlike its main competition, Datalynx does not offer proprietary funds and has no retail arm offering advisory services, meaning it will not compete with PPC's clients.

    The number of prospective accountant clients is huge, making the channel of distribution an enormous opportunity for whomever comes up with the best plan to assist CPAs in what PPC vice-president Dan Youse calls "a natural extension of a CPAs existing services." He added that an advisor resisting the CPA inclusion in investment advice would be similar to attorneys who resisted CPAs becoming involved in estate planning.

    Fully 25% of the approximately 400,000 CPAs have expressed some interest in managing money for their clients, according to one Datalynx employee who just attended the LINC conference for CPAs in New York City. Even if a small fraction of that number end up as advisors, it would dwarf the current number of RIAs in the industry.

    Datalynx head Skip Schweiss agrees that the potential inherent in the CPA market is very attractive to the company.

    Other attendees, though, expressed qualifications about the wrinkles that still need to be ironed out before CPAs become a major force in the industry.

    An advisor in the audience for PPC's presentation of its services at the conference expressed what might be a common sentiment among RIAs when he said, "Right now we have great relationships with the CPAs our clients deal with, but what will happen when we're competing for the same clients -- it could get kind of nasty."

    But a CPA in the same audience responded by saying "as a CPA who's been doing this [investing money for clients], I can say with confidence, there's no one who can compete with me."

    Studies have shown that CPAs have much more credibility with their clients than any other form of financial planner, so a greater move towards fee-based advice seems to be inevitable -- it just remains to be seen what form it will take. Possibilities include current RIAs allying with CPAs for some form of a hub-and-spoke relationship, with CPAs feeding clients to an affiliated RIA or CPAs going independent to manage the investments on their own.

    But since investment management is out of the typical CPA comfort zone, it will take time before we see how the initial efforts of programs like the new PPC-Datalynx alliance bear fruit. Presently, only one CPA has been registered as an investment advisor and is trading via the Datalynx platform, but according to PPC, there is a group of CPAs either registered or close to it who should begin trading soon.


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