There’s No Accounting for ‘80s CPA
Then Now
--Bookkeepers --Tax Planners
--Number crunchers --Career counselors
--General Practioners --Finance advisers
--Tax Processors --Managers of properties
--Auditors --Father confessors
In the ‘60s, Americans of many generations outwardly questioned the Establishment and voiced their protests. But, in the ‘70s, they turned inward, seeking psychiatrists and psychologists, singly and in groups, to help them find themselves.
Now, they are looking to something far different, their pocketbooks. And they are searching for the gurus of the ‘80s--accountants.
“It’s definitely true that accountants are running our lives. It’s going back to the 1940s idea of making money,” said Faith Popcorn, who runs BrainReserve, a New York City-based company that researches and analyzes national trends. “The idea is that money is a motivating factor of happiness and success. You are what you have in the bank. You are what your assets are.”
Back to the ‘40s
Popcorn, 40, who started her market consultancy firm 12 years ago, said the trend toward the accountant becoming “a guru and friend” to the person he advises began about 18 months ago, when Congress began talking about changing the tax laws. President Reagan signed the tax overhaul bill Wednesday.
For their part, Southern California Certified Public Accountants say that the trend toward accountants as gurus already has started here. Today, many California CPAs are advising clients about everything from financial futures to personal and medical problems.
It seems to indicate that California is, as John Naisbitt said in his 1982 book “Megatrends,” “the key indicator state where most of the social invention in America occurs.”
“The new tax laws in current form can’t last long,” said Elizabeth Scott Donnelly, a CPA who runs her firm from her Marina del Rey apartment. “Taxation is a method of controlling the economy and society. But the law was not very well thought out. They did not follow through with the thinking process as far as the plan goes. They’ve already done mayhem. All of my clients are calling, asking ‘What’s this? What’s that mean?’ ”
A Case of Mayhem
The bottom line, Donnelly said, is that “the IRS is forcing more people to go to accountants, and more people to complicate their lives by forming business entities.”
Currently, William Holder, associate professor in the School of Accounting at USC, is teaching his graduate students that they must be jack-of-all-trades advisers as future accountants.
“The green-eyeshade image no longer applies to the accountant. The public expects a lot from us,” said Holder, who received a doctorate at the University of Oklahoma and was in private practice as a CPA before joining the USC faculty in 1979. “It used to be audits of financial statements, but now it (accounting) requires analytical abilities, economic realities interpreted. . . . Business is exciting, a rewarding area of endeavor. Forecasting the future is exciting stuff.”
“I can bang out a tax return, but the important thing today is to really understand the people,” said CPA Stephen Getzoff, who runs Getzoff Accountancy Corp. in Beverly Hills. “A lot of times the questions people ask are more important than the answers. Now, you take a strong behavioral science approach to this business. If they have goals, you help them achieve them. If not, you help them find them. And you try to take what happened in the past and use it for the future. Sort of womb to tomb financially.”
‘Pendulum Is Swinging’
Getzoff, 42, said that accounting has changed since he entered the profession 13 years ago. “I think the pendulum is swinging,” he said. “When I went in, the accountant was a general practitioner. Through the ‘70s, it changed with the age of specialization to accounting specialist, tax specialist. Now, I think you have to be a generalist, and you have to have a bag of tricks for all sorts of things. I think as an industry, accountants are starting to wake up.”
In addition to assisting his clients with planning for their financial futures, Getzoff said that he has helped one get off drugs and into a rehab program, another to agree to a cooling-off period before he and his wife filed for divorce, several others to sell their homes and buy new ones. He also has assisted clients in getting loans to begin small businesses, helped others learn how to start a mining business or a llama ranch.
“My gratification comes from being able to design programs and help people,” Getzoff said. “So, I do a lot of handholding and leading people through their lives. You know that old saying: ‘Give a man a fish, and he will eat for a day. Teach him to fish and he will eat for a lifetime.’ In this situation, we’re teachers.”
Getzoff’s partner, Robyn Burke, said she, too, does “a lot of handholding” in planning her clients’ financial futures. “To do tax planning for a person, there are so many aspects that have to be considered,” said Burke, 63, who decided to become a CPA at 50 and spent six years going to night school at UCLA before joining Getzoff. After getting her required two years’ experience with an accounting firm, Burke took the CPA exam and became a partner in the firm.
“You have to be people-oriented to do this kind of work,” Burke said. “I enjoy the number work, too, but you really have to know a lot about a person’s life to do--the buzzword now-- personal financial management. When you’re dealing with people’s money, you’re dealing with something very close to their heart, involving every aspect of their lives.”
‘One-Stop Shopping’
CPA, lawyer and former IRS agent Louis Swartz said: “I’m a confidant, a father confessor, an economic adviser, a tax planner, you name it. I give personal advice, even free medical advice if necessary. This is a one-stop shopping center here.”
Swartz, 62, who shares an office in downtown Los Angeles with his brother, Jacob, said that the new tax laws will generate such confusion that people who probably never considered using an accountant will be turning to one.
“I think this new tax law is a travesty,” Swartz said. “It’s a hoax on the American people because it’s not a reform. It’s not simplified, that’s for sure. They’re taking away the deductions from the middle class and lowering the rates, so they (the middle class) think they’re coming out ahead. But it’s going to end up that they’ll lose the deductions and the rates will be raised.
“I am an outlet for a lot of clients, and they’re all asking, ‘What does this new tax plan mean for me?’ Well, I foresee in subsequent years that the rates will go up or there will be a national sales tax. And that hurts the poor and the middle class the most.”
The new tax legislation “confused and scared people,” Popcorn said. “We have had that same tax law for six decades, and now we don’t know what it (tax reform) is, but we’re sure we’re getting screwed. People want control over their lives, and who can give you better control than an accountant. It’s the preventive idea, like with dental care.”
Idea of ‘Cocooning’
Popcorn said that relying on accountants are “not just the baby boomers. It’s everybody wanting security in their old age. They’re lacking confidence in the Social Security system, and part of it is the idea of ‘cocooning,’ wanting to be in a safe place. As far as security with money is concerned, we’re papering the walls of the cocoon with money. It’s all a part of wanting control over our lives. Who can give you better control than accountants?”
Popcorn, whose name is the result of a mistake by Ellis Island immigration officials who wrote “Popcorn” when her Italian grandfather said his name was “Poppa Corne,” predicts even more reliance on financial experts in the future.
“We’re going to see a subgroup forming: Financial experts who don’t have degrees,” Popcorn said. “Within a year we’ll see money clinics, places where you walk in and get some instant advice on how to make instant money. People are going to be looking for more street advice. . . . They want convenience, like in the food industry. In money matters, they also want things that are recognized, traditional and safe.”
Marvin Cetron, head of Forecasting International Limited, a technological, economic, sociological and political forecasting firm in Arlington, Va., agreed that those who plan financial futures are becoming increasingly important in the lives of most Americans.
“Financial planning is the most important profession of the future,” Cetron said. “They take where you are and tell you where you’re going in the future. The accounting field has been a lot different in the past. CPAs are the ones who looked backward and said, ‘This can be taken off here and there.’
Making Recommendations
“But, in the future, people will be looking to accountants saying, ‘Where should I put my money now?’ Especially with the new tax laws. People want to know what they should do with their money in the future, put it into real estate, tax bonds, etc. That’s not what we used to use accountants for. The good CPA not only knows what’s gone on before, but will know need to make recommendations for where people should put their money. That’s going to make a major difference.”
Donnelly, 48, ran a tax and bookkeeping service in Pullman, Wash., before deciding to relocate to Arizona and go back to school to get her accounting degree in 1977. She worked for a CPA firm in Los Angeles for the required two years, passed the CPA test and opened her own business seven years ago. She said that accounting used to be a profession for men, but more women are entering the field.
“For my clients, I work with a variety of people: Realtors, stock brokers, lawyers, whatever is needed,” she said. “I have some clients who have never seen the property they own. I have some clients for whom I manage everything. They see a report at the end of each month that tells them what came in and what came out of their bank account and how much is there now.
“Years ago,” Donnelly said, “I told a client, ‘By the time you leave my desk, I’ll know everything about you but your shoe size, and if they’re orthopedic shoes, I’ll probably know that.’ It’s a good thing my first love was psychology. This is a very personal, private relationship you have with your client.”
Even accounting firms that make up the Big 8, eight national/international firms that deal mostly with corporations and individual clients with substantial wealth, are expecting changes for accountants, according to William Greaney, CPA and a partner in the tax department of the Los Angeles office of Deloitte, Haskins & Sells, a Big 8 firm.
Other Big 8 firms are: Arthur Anderson and Co., Coopers & Lybrand, Ernst & Whinney, Peat, Marwick, Mitchell & Co., Price Waterhouse, Touche Ross & Co. and Arthur Young & Co.
“One thing accounting firms are getting more involved with in the last five years is personal financial planning,” Greaney said. “There’s a strong push into doing more for an individual than taxes . . . People are probably going to be looking more and more to us before they make an investment decision. We’re seeing that more so now, and the complexity of this new tax bill changes things. People will find now that they’re playing in a different ballgame, where the rules have been changed.”
“Accounting is upgrading from a discipline to a profession,” said Eugene Jennings, senior professor of business administration at Michigan State University in East Lansing, Mich. “They are advisers to one’s life. It’s a greater opportunity rather than simply being number crunchers. It’s the psychology of value added. Everyone wants to get in on the value added mode for customers--medical doctors, psychologists, clergymen, pharmacists. You create more value for the customer and you make more money yourself.”
Jennings, 60, added: “By offering special services beyond bookkeeping, accountants can offer an area of career guidance, or, really, life guidance. An accountant finds himself or herself not only being a historian, which is what accounting is, but having to be a futurist, too. . . . There is a great deal of impact toward being financially secure. The whole idea is planning and that’s where everybody is trying to go. Especially people in their 30s. They are aggressively seeking advice. My generation never took advice, so I think this is a very healthy situation.”
