Elder Care Accountants Manage Baby Boomers' Finances
With the oldest Baby Boomers hitting their 60s, a multibillion-dollar niche in accounting is developing to help seniors and their adult children plan for the future care of those who can no longer live independently.
Elder care accounting services range from simple estate planning to more complete services such as managing accounts, paying bills, reporting to adult children regularly about incapacitated parents or finding reliable geriatric service providers.
The elder care accounting specialty particularly appeals to certified public accountants (CPAs) who are reaching retirement age themselves, says Mitchell Freedman, CPA, president of Mitchell Freedman Accountancy. "Serving older clients is something they're interested in," says Freedman, a Personal Financial Specialist (PFS).
Elder care accounting is not for new accounting graduates, says James Hintzke, CPA, a Certified Senior Advisor (CSA). "It's really for CPAs who have already been in the field a number of years and have a foundation of audit, tax, financial planning and accounting for different types of clients. Even government and industry CPAs would not be well-positioned to launch themselves into this arena."
While designations such as Hintzke's CSA and Freedman's PFS aren't required, they demonstrate industry knowledge, as well as commitment, that can help sell clients on your suitability, just as holding a CPA designation indicates your accounting knowledge.
Good Fit for Woman CPAs
George Lewis, CPA, chair of the American Institute of Certified Public Accountants' (AICPA) PrimePlus/ElderCare Task Force, says this niche best fits a middle-aged, female CPA with aging parents of her own.
"That doesn't mean there aren't some male CPAs who've been successful or that only women should be involved in this," Lewis says. "But it's usually the daughter that ends up being the caregiver, and people who have had experience [with aging issues] have more empathy than those who haven't. Most people who will be availing themselves of this service will be elderly widows, and those clients will confide more to another woman than they would to a man."
Elder Care Accounting Market Potential
Firms and CPAs blazing the trail in elder care accounting have tried many different setups. The most common arrangement is for one partner in a multipartner practice to champion the idea and then create the niche of providing services to seniors. The AICPA estimates the annual market for elder care accounting services at $2 billion to $7 billion, with the average practitioner's fees ranging from $300 to $1,500 per month per client, depending on the level of service provided.
Bruce Robbins, CPA, a partner in Kutchins, Robbins & Diamond, says that while he's found doctors, paid bills and managed finances for elderly clients, he doesn't think elder care services alone could sustain a practice now, although that could change in the years ahead depending upon how well Baby Boomers age. For now, when any client needs help with financial issues such as long-term healthcare insurance, he sends them to the firm's affiliated financial planning practice.
Develop Your Knowledge
To build expertise in senior services, Hintzke recommends the elder care tracks at the AICPA's financial planning conference, the association's self-study materials and offerings from the Society of Certified Senior Advisors.
Be Prepared for Emotional Issues
Whether you pursue the elder care niche as a sole practitioner or as a partner in a larger firm, be prepared to deal with more emotional issues than you'd normally see in a business-oriented accounting specialty. Psychological issues from childhood will surface and cause bickering among adult children, and some clients will eventually have dementia. To cope with it all, you'll need a great deal of patience, empathy and tact.
But once you do a great job handling the parents' financial affairs, you'll inevitably pick up business from their adult children. After all, nothing persuades adults to get their financial houses in order more convincingly than watching a parent's assets dissolve in the face of huge nursing home bills, or having to wrap up everything after a parent's death.