Accountants are increasingly establishing wealth management practices. The choice of wealth management business model makes a great deal of difference to the success of the wealth management practice.

According to Andree Mohr, chief implementation officer for Integrated Partners, a leading financial advisory firm where she oversees the growth initiatives, including the CPA Alliance program, “One wealth management business model is not inherently better than another. The best choice of a business model is the one that is the best fit for the accounting firm. It’s also possible to mix and match the different business models depending on circumstances.”


Accountants have choices, including internal, outsourced, and hybrid models. All have to be carefully evaluated against the human and capital resources of the accounting firm and the overarching goals for the wealth management practice. The following are the five main wealth management business models to choose from…

  • Build: The accounting firm creates its wealth management practice from scratch. The biggest obstacle tends to be recruiting wealth managers.

  • Buy: The accounting firm buys one or more wealth management firms.

  • Build then add: After building the wealth management practice, the accounting firm buys one or more wealth management firms or adds to the ranks by recruiting more wealth managers.

  • Joint Venture: The accounting firm enters into a formal equity or revenue-sharing joint venture with one or more wealth management firms.

  • Referrals: On a case-by-case basis, the accountants refer their clients to external wealth managers for predetermined compensation.

According to Paul Saganey, founder and president of Integrated Partners and co-author of Optimizing the Financial Lives of Clients: Harness the Power of an Accounting Firm’s Elite Wealth Management Practice, “When considering which wealth management business model is most viable, there are many variables to weigh. Factors affecting which business model an accounting firm adopts include the cost of implementation and time to market. Other factors include how well each option aligns with the accounting firm’s culture, values, and way of doing business. Very important is the different cost structures.”

Fixed costs are high if the accounting firm builds a wealth management practice from scratch. Wealth managers are often expensive to recruit and retain. Buying a wealth management practice can be even costlier, at least initially. Today, there is likely to be a significant premium for the acquisition.

If an accounting firm aims to build a wealth management firm and then add other wealth management firms or recruit more wealth managers, the fixed costs are usually high. For many accounting firms using this business model, the idea is to use the profits from their wealth management practice to finance the additions.

The fixed costs for joint ventures are low as the expenses are variable. For accounting firms, some additional personnel is usually required. Still, the respective firms' operational costs are principally borne while revenues are shared. Similarly, referrals have little, if any, fixed costs. 

“Because of the considerable cost differentials among the business models, most accounting firms start with the joint venture or referral model,” explains Mohr. “This lets the accountants get a very good idea of what it takes to succeed in the wealth management business. A large percentage of accounting firms who adopt the joint venture or referral business models continue with these models, but some that have experienced success transition to one of the other wealth management business models.”

Determining which wealth management business model to pursue can be complicated for some accountants. Each has its advantages and drawbacks. What is detrimental to many accounting firms with wealth management practices is that their business models must align with their firm's culture and strategic initiatives. As none of the five business models is inherently better than another, the best one for any particular accounting firm is a function of several factors.

Russ Alan Prince is the executive director of Private Wealth and a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.