What is the basis for any relationship a small CPA firm has with their clients?
The main reason a person or business chooses a firm is personal and professional comfort with the firm and its people. From this comfort develops trust and confidence. From this trust and confidence develops an ongoing and usually, long-term relationship that benefits both the firm and the clients.
To understand the required components of an effective PCA, it is extremely important we review the fundamental elements of a good relationship between the clients and the firm. Why is that important? A solid PCA agreement must address and incorporate the relationship between clients and the firm. A well-written and, if necessary, executed PCA agreement provides as much continuity as possible under difficult circumstances to keep the level of client comfort and confidence as high as possible. A real test of a solid PCA will come only when it is needed and by its very name it is needed only when there is a death or disability to the owner(s) of the firm for which the PCA was designed.
In this module we will discuss and review five major components of determining the who, what, when and why of a PCA.
Before we begin, it is important to acknowledge a PCA is not usually designed to be a succession strategy. It can be, but it is most often defined and utilized as a JIC - Just In Case. We will discuss this more later in this module.
It is also important to note that most PCA agreements are entered into by a sole practitioner but, a PCA can be a tool for any smaller firm. If a PCA is going to be used in a firm having two partners or more, there are very unique considerations that must be reviewed and analyzed for the PCA to be most effective. Because of the unique circumstances it will not be possible to share much information regarding the use and structure of a PCA agreement between multi-partner firms. If you believe a PCA has potential benefit for you and your multi-partner firm, it would be best to request a special and complete confidential consultation through the Ask The Advisors Now program.