Selecting a CPA firm for complex family wealth
Built on Chapter 7 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
A billionaire family needs a CPA firm that can turn incomplete information from many entities into a clear set of questions and deliverables. Select the firm by the work it will own. Filing returns, maintaining books, and planning with other advisors require different assignments, even when the same firm offers all of them.
Chapter 7 distinguishes accounting and reporting from more specialized administration. That distinction helps when comparing CPA proposals. The family should know whether a quoted engagement includes the records needed to prepare the work or assumes someone else will produce them.
Start with the entity list
Give the prospective firm a controlled summary of the ownership structure and the kinds of activities involved. Identify trusts, operating companies, and private investments. Note where a different professional already maintains the books.
Ask the firm which additional facts it needs to assess the assignment. Avoid requesting a definitive fee or completion commitment from a partial picture. A careful firm should be able to explain what it needs to know before confirming the work, and the office should be willing to supply it appropriately.
Richard's concern about promised planning
In my recorded remarks about the family-office industry, I describe clients expecting proactive tax planning and then discovering that the promised planning is not being delivered. I also describe departments that fail to communicate. This is a service-delivery concern, not tax advice.
I would apply it by asking a prospective CPA firm to distinguish preparation work from planning work. Who notices a change in the family's activities? Who is responsible for discussing it with the relevant advisor? A general promise of proactive service needs an actual person and a clear way for the information to reach that person.
Find out who does the ordinary work
Meet the person who will request information and investigate discrepancies. Ask who supervises that work and who can take over when the contact is absent. A family office needs continuity through the busy periods of both organizations.
Have the firm explain its intake process. A secure place to upload records is useful, but the office also needs to know how it will learn that something is missing or inconsistent. Establish who receives those requests and how the unresolved items are prioritized.
Clarify the bookkeeping boundary
Ask whether the engagement assumes reconciled books and complete ownership information. If it does, name the person responsible for providing them. If the firm will prepare the books, establish the information it needs from the custodian and investment team.
The family should not discover after work begins that every unreconciled account is a separate project. Put the known condition of the records in the scope discussion. Ask the firm to identify corrective work before treating an estimate for ordinary preparation as the total expected cost.
Test coordination with an actual change
Use an ownership change or proposed new entity as a discussion exercise. Ask how counsel's final instruction reaches the CPA team and what supporting material the team requests. Then ask who updates the office's recurring information schedule.
This is a test of workflow, not a request for an off-the-cuff tax conclusion. The firm should explain how the right professional evaluates the facts and how the office learns about follow-up work. The same process should accommodate a change initiated by a family member rather than counsel.
Compare engagements on the same basis
List the deliverables each firm includes and the work each excludes. Ask how it bills for information cleanup, amended instructions, and meetings with other advisors. Discuss who authorizes additional work and who receives the invoice explanation.
The office may choose to pay more for a firm that takes clear responsibility for a difficult function. It should be able to state the reason. Fee comparison becomes useful when the work and accountability are visible, rather than when the family has only two totals.
Establish a usable calendar
Have the selected firm identify its information requirements and professional timetable for the engagement. The office should build its internal collection dates around that request. Confirm the route for late-arriving investment information and unexpected questions.
Keep a record of outstanding items and the person responsible for each. Ask the firm and office lead to review that list together before a missing record turns into an urgent demand on the founder.
What to take from this
- Separate bookkeeping, preparation, and planning responsibilities.
- Meet the people handling information requests.
- Make coordination and missing-record escalation explicit.
This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.
Questions and answers
Does return preparation automatically include proactive planning? The engagement should specify the planning work and who initiates it.
How should firms be compared? Compare the same deliverables, record conditions, responsibilities, and additional-work terms.