With so much overlap between the job of a CPA and the job of a financial planner, many CPAs are starting to offer financial planning as a service. Life insurance is an integral (and often overlooked) part of financial planning, but there are certain challenges CPAs must overcome in order to help their clients choose the right plan.

One of the biggest obstacles CPAs face relates to differences between business models. CPA financial planners typically use the registered investment advisor (RIA) model when it comes to advising clients. This means that they are paid by fees and not on commission from selling a product or service. Many CPAs say this model “feels right” for a number of different reasons — namely not being driven by the sale of a product.

Unfortunately, this is in direct conflict with the insurance industry model, where brokers are typically paid on commission. Some CPAs frown on this model and even avoid advising clients altogether on insurance policies.

But life insurance is a valuable tool that cannot be ignored. Here are three reasons CPA financial planners typically avoid advising clients about life insurance and how you can educate yourself to overcome these challenges.

Fear of what you don’t know

CPAs have taken an oath to provide service in areas of their expertise. In general, CPA financial planners don’t have a lot of knowledge about life insurance, so they avoid going down this path altogether with their clients. This is easy to overcome with continuing professional education courses

Your clients have been burned in the past

If this is the case, you should find out what happened instead of avoiding the issue altogether. The good news is that many of today’s life insurance companies are quite transparent, if you know what to ask for. Make sure you request the “expense pages” and thoroughly review them with the broker and your client.


This goes back to the view many CPAs have on the insurance business model. Life insurance is sold on a commission basis, and most brokers receive the majority of the cut as soon as the first year premium is paid. Knowing that, it’s easy to assume that they aren’t interested in servicing the client for many years to come.

More than likely, this applies to the minority of insurance brokers, but this presents a great opportunity for the CPA financial planner. You can separate yourself from other CPA financial planners by educating yourself on life insurance and financial planning.

If you’re interested in learning more about all aspects of financial planning, register for one of our webinars.

This article was sourced from Susan Bruno on aicpa.com. The full article can be viewed here

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