Saving a sufficient amount of money for retirement was the top concern of clients in a recent survey of accountants who provided
financial planning services.
Ninety-one percent of 427 ac-countants surveyed in December by the American Institute of Certified Public Accountants of New York reported that their clients' No. 1 financial worry was retirement. The cost of health care was No. 2, followed by paying for their children's education.
Thirty-two percent of respondents reported that clients approaching retirement age were postponing leaving the work force for financial reasons.
Many clients face a "balancing between funding and saving for retirement, and they're also trying to fund some educational expenses for their children," said Michael Eisenberg, an accountant and registered investment adviser at Eisenberg Financial Advisors, a Los Angeles firm that manages $15 million.
Accountants reported that many clients rely on more than one source of funds to pay college tuition. Eighty-three percent of respondents said clients were paying for college directly, while 64% said their clients' children were applying for financial aid, and 64% said clients were tapping into their own investments.
DEBT BURDEN
Accountants have also noticed that clients are more likely to finance their lifestyles with debt. Fully 30% of the CPA planners said that clients were carrying more credit card debt than they did five years previously.
For those who said their clients had more debt, 81% blamed excessive discretionary spending. The median level of increased credit card debt was $8,333.
More of his younger clients owe more money than in years past, said Mr. Eisenberg. "They've got college loans, and there's definitely more of a debt burden these days," he said.
As many as one-third of respondents with clients between the ages of 25 and 34 reported seeing those clients forgo buying a home (35%), having children (24%) and even saving for retirement (24%) for financial reasons.
"Young people need to start thinking about these [issues] very quickly," Mr. Eisenberg said. "The time will go very fast. They'll take trips and buy homes. They need to think about what it'll be like 35 years from now when they stop working."
While many of the clients who approach Michael J. O'Keeffe, a certified public accountant with Oakdale Wealth Management LLP in Medfield, Mass., are concerned about retirement, he's also helping them with purchasing second homes, caring for parents and estate issues. He declined to disclose assets under management.
More CPAs will continue to provide financial planning to their clients because of the demand from the marketplace, said Mr. O'Keeffe. "I really like the idea of CPAs' getting more involved with wealth management. They know numbers. They may not be the greatest salesmen, but that can be good."
Of the 427 respondents, 44% managed more than $10 million in assets, 10% managed $5 million to $10 million, 21% managed $1 million to $5 million, 8% managed between $500,000 and $1 million, and 17% had less than $500,000 in assets under management.
Lisa Shidler can be reached at [email protected].
