Total Rebalance Expert (TRX) and the American Institute of CPAs (AICPA) announced an arrangement giving CPA financial advisors a discount on TRX's rebalancing software.
TRX is a rebalancing software solution that works with Schwab PortfolioCenter and its founder, Sheryl Rowling, is an A4A blogger and a CPA, and she really is a creative thinker and entrepreneur.
I've written about TRX in the past and it is a less costly solution than other rebalancing apps for advisors.
Striking a discount deal with the AICPA is a good idea for TRX but no guarantee of huge success because of the strange brew that are CPA-investment advisors.
While the AICPA has 370,000 members, only a fraction of them are financial advisors. In fact, the number of personal financial advisors is not even significant enough for the trade group to break it out on its website.
Moreover, CPA financial advisors have proven to be an extremely confused group. That's because many CPAs regard giving investment advice as the third rail of an accounting practice.
CPAs providing tax and accounting advice to small businesses work in a comfort zone that suits most CPAs, who are usually conservative.
Providing advice on investments, many CPAs believe, can jeopardize their tax and accounting fees. An accountant doesn't get fired when a business client has a bad year, but an investment advisor with poor returns could lose the client.
This fear keeps many CPAs who provide accounting and ax advice to small businesses and individuals from entering the investment advice business.
In addition, those CPAs who do enter the investment advice business often see it as a way to pick up some additional income. They affiliate wit a broker/dealer or turnkey asset management provider and hand over most of the advising to package product providers and they never make the effort to become steeped in investment advice. Yet only advisors of that ilk are likely to value TRX's powerful rebalancing capabilities.
The tiny fraction of CPAs who build their own portfolios for high-net worth individuals would be the target for TRX's ability to help them build tax efficient portfolios, and these CPAs generally do have one characteristic in common with their CPA brethren: frugality. So the AICPA-TRX discount program may actually have some success with that group.