Do You Need Both an Accountant and Financial Advisor?

A financial advisor can offer services and coaching that most CPAs don't.
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Many small businesses have a financial team - a CPA as well as an advisor - who work together. (Photo: Pressmaster/Shutterstock)

As a small business owner, you’re probably not an accounting or finance whiz. Chances are, you’ve already hired an accountant to help you manage your books and assist with taxes. Is that enough, or could your business benefit from some additional financial guidance?

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“We have to be more proactive as consumers in asking questions to our financial advisors and accountants.” -Kurt Arseneau (Photo: Kurt Arseneau)

NCR Silver spoke with Kurt Arseneau, a financial professional with oXYGen Financial, Inc., and Alan Salus, CPA and owner of business tax advisory firm Salus Consulting, about the differences between an accountant and a financial advisor and how each can help a small business owner.

Related: DIY Taxes vs. Hiring a CPA: What’s Best for Your Small Business?

Accountant vs. financial advisor

An accountant (some but not all of whom are CPAs) traditionally handles filing taxes, reconciling bank statements and ensuring your business is compliant, said Salus.

“We want to make sure you’re doing the basic things you need to do to report your financial information correctly.” -Alan Salus

Financial advisors typically help manage a business’ long-term assets — such as stocks and bonds, property, equipment, copyrights — and set up employee retirement plans. They can help you implement certain compensation structures such as phantom stock plans. They often take care of the business owner’s personal financial portfolio as well.

Both CPAs and financial advisors are qualified to provide financial guidance to business owners, serving as a sort of “coach” on financial strategy. Because a business’ accountant is more in tune with the daily operations of the business, he or she is often better positioned to share financial “best practices” for the business, as well as help with strategic decisions. A financial advisor, on the other hand, can help build and implement a strategy to support the long-term financial success of the business.

Identify what you need

Your needs may come down to your comfort level with finances and the time you have to devote to them. “Time is precious resource and we sometimes forget how valuable it is,” Salus said.

If you’re organized and have experience with managing a business’ books and investments, you may need minimal support from a CPA or financial advisor, said Arseneau. But he warned owners: “Don’t bite off more than you can chew.” For many owners, it makes sense to outsource bookkeeping and accounting and get help with financial strategy in order to focus on the core business and how to improve it.

Related: 7 Bookkeeping Mistakes Your Small Business Is Making

Find out what they can offer

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Before committing to a financial advisor or a CPA, find out exactly what services they offer. (Photo: marekuliasz/Shutterstock)

“Do your homework when it comes to picking a financial advisor or a CPA,” Arseneau advised.

Find out exactly what services the person offers. Some CPAs focus on handling small business finances and filing taxes and do very little consulting. Likewise, a financial advisor may only manage investment accounts rather than providing in-depth strategic coaching for your business.

“Ask for referrals, and ask the hard questions that need to be asked,” said Arseneau. “We have to be more proactive as consumers in asking questions to our financial advisors and accountants.” If you hire someone who’s a bad fit, he said, “it can have a huge impact on your bottom line and squeeze the growth of your business long term.”

Building your financial dream team

Once you’ve determined your needs, Arseneau recommended finding one firm that can meet all of them.

As the financial industry evolves, more firms are taking a “one-stop-shop” approach, he noted. They will not only manage your business’ money but provide tax preparation and advice as well as estate planning. Many firms have both CPAs and advisors on staff who can work together as a team on the account.

“A team-based approach is most likely your best approach,” said Salus. “If you have a dynamic business, it is better to have financial team in place early so that, as your needs change, the roles of a coach or advisor can be utilized immediately.”

For a team to be successful, communication is key, said Arseneau. “If my financial advisor is giving me advice about something and then I go to a separate CPA and he gives me conflicting advice, who do I agree with?” Make sure to get everyone on the same page with regular updates and team meetings, he said, especially if they aren’t at the same firm.

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