Waldert noted that the CPA firms that tend to affiliate with independent broker-dealers like H.D. Vest are typically smaller one- and two-person shops. Larger CPA firms--those with 10 or 15 workers--can set up their own registered investment advisor, he said.
In keeping with the CPA business, independent brokerages that work with CPAs tend to be much more fee-oriented than the independent brokerage channel as a whole, Waldert said. In addition, he noted that CPAs tend to invest much more conservatively than other advisors. "They tend to be more preservation-oriented than growth-oriented," he said.
Palaveev said CPAs can be overly conservative in their advice because their primary business is often not their advisory business. "They're afraid most of all to harm their primary business" by being too aggressive in their advisory business, he said.
As of Dec. 31, about $4.99 billion of H.D. Vest's $26 billion in assets was in fee-based assets, and 41% of its advisors were on its fee-based platform, the company said.
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