If artificial intelligence is eroding the base for the analytics-based transactional advisory work (see our feature story), what’s left? Where are the long-term, relationship-driven client-centric advisory services that call for holistic judgment take account of human psychology and emotion? 

Fortunately for accountants, there are a lot to choose from, including the four we’re examining: forensic accounting, valuation services, M&A advisory and estate planning. These are just some of the areas that are seen as relatively safe from disruption by AI and automation — at least for now. 

Forensic accounting, which often involves analyzing huge amounts of financial data and finding the story behind the numbers, might seem at first a natural fit for AI disruption. But look a little closer at what forensic accountants actually do, and it becomes clear that this is only part of story, because while data remains vital to their work, it’s useless without the human element, according to David Zweighaft, a partner with RSZ Forensic Associates, a New York City-based forensic accounting and litigation consulting firm.

“The ability to explain the nature of a fraud scheme and how it was detected and who was running it and why they did it is something that probably will not be comprehended by AI anytime soon. We’re tasked with answering questions and, at the end of the day, parties also like to know [the why behind the answer],” he said. 

This is not to say that forensic accounting professionals do not use AI. Machine learning-driven models play a vital role in sorting through all the data and picking out possible red flags. Zweighaft said that forensic accountants have long used AI models, sometimes bespoke to the client, to contextualize a dataset so as to more easily spot anomalies and understand the financial damages they could represent. Still, he said it can be a “chicken and the egg” scenario, because those models still need to be validated one way or another. 

(See our feature story, “Staying ahead of AI.”)

“You can use AI to build and run the model, and then you have to validate it yourself or you can sweat out the model and then validate it using AI,which I think is very cool. It gives you a lot of latitude in how you want to take advantage of it, and at the end of the day, it’s really up to the practitioner to determine what he or she feels is the most prudent way to approach it,” he said. 

Still, once such models are prepared and validated, they can produce insights that even human professionals might miss. Zweighaft talked about an older case where someone was booking flights first on Delta and then would “dummy up” a second airline voucher for American Airlines. This was before AI analysis was in heavy use, so it was human investigators who eventually realized this person was putting the same ticket number on both documents, which eventually exposed him. Zweighaft said that feeding the flight data into an AI might produce the same sort of finding but faster. 

“Given the same set of circumstances, you could probably feed this into AI and AI would be able to pick these out just with a great deal of precision: ‘This is not a Delta flight number. This flight never occurred.’ [It] could look at the airline flight guides and come up with all of this information far more quickly. So that’s a potential timesaver and that’s something that a human being might miss,” he said. 

Like many practitioners, forensic accountants also use AI for data entry and processing, which before were time-consuming and frustrating, as well as “document interrogation” and analysis. 

“Back in the old days, you used to get stacks and stacks of paper that you had to scan. Now you get reams of PDFs and you have to convert those into machine-readable format. So whether they’re bank or brokerage statements or other structured data sets, doing that used to be very time-consuming and tedious; now you can do multiple terabytes that can be done overnight. It really is amazing,” he said. 

This plays into his larger view of AI as, at best, a “benign tool” that assists forensic accountants with research and data analytics in various parts of the workflow, versus something that could conceivably automate the entire engagement. This is because, while AI is great at handling the data-related aspects of a forensic engagement, it can’t yet handle tasks that rely more on human interaction — such as interrogation. 

“[I’ll] ask ‘So that’s your signature on this document. Would you like to explain that?’ And the physical manifestation of the confession moment is when the person contracts, they hunch down, they take a deep breath. They exhale and they’ll say something like, ‘I was only doing it to keep the company afloat, the medical bills were crushing us and I needed the money, I intended to pay it back.’ You’re not going to get that from someone being interviewed or questioned by a HAL 9000,” he said. 

(Read more: “AI in advisory: What work is at risk?“)

With this in mind, he is confident that what forensic accountants do won’t be replaced by AI, at least in the immediate future. There are just too many squishy human elements that don’t necessarily conform to a cold data analysis. He concedes that maybe one day in the future there could be AIs doing full financial forensics, but he is not sure whether this would be a good thing. 

“What we do as forensic accountants is never going to be replaced. AI will augment, it will support what we do, [but] I don’t know that skepticism can be programmed. And that is going to always be a differentiator when we’re looking at when we’re doing in-person interviews. [For instance], they’ve done great work with detection of dishonesty using video. Is it perfect? I don’t know. Is it going to take the place of me doing admission-seeking interviews? I don’t know. It’s scary to think that you can take the human element out of investigations, but remains to be seen,” he said.

(See how AI is impacting firm services in valuation, estate planning, and M&A.)

Tax season is a busy time for financial advisors, but it also brings overlooked opportunities for client coaching on year-round tax savings and for future growth via CPA referral agreements.

With the right outreach and shared professional dedication to clients, certified public accountants and enrolled agents who prepare returns could turn into key long-term collaborators, sending prospect leads to advisors and vice versa. And clients who see tax planning as a short-term pain confined to a few months each year may be missing strategies that could reduce their payments to Uncle Sam.

By the time clients file their annual returns to the IRS, they are “just recounting history for the most part,” said Terry Parham, financial planner and chief financial officer of California, Maryland-based Innovative Wealth Building. “If April 15 comes around and you don’t like the result, then yesterday we should have done something about it. But today’s the next best thing.”

READ MORE: A primer on the IRA ‘bridge’ to bigger Social Security benefits

Pursuing growth and savings

CPA referrals sometimes come with a steep cost — like those charged to registered investment advisory firms by custodians — but they often don’t have any financial aspect beyond a friendly agreement between the advisor and the tax pro to send clients both ways, according to Parham and Mike Byrnes, the founder of advisor growth consulting firm Byrnes Consulting. The referral dealmakers and their clients reap benefits as the advisors “start to quarterback all of the professionals that go into a wealthy person’s life,” Byrnes said.

“Once you start to expand that way, it’s a multiplier. You’re all helping each other’s businesses and it really can flourish,” he said. “Direct mail, for example, is expensive, but the more the professionals start to combine into something the less money it costs.”

And those incoming and existing clients could greet future tax seasons with much less dread, as advisors’ teamwork, long-term planning and the accelerating use of optimization technology boosts the customers’ bottom lines and nest eggs for retirement. Currently, many view taxes with about as much enthusiasm as a weeklong visit to their in-laws or a trip to the Department of Motor Vehicles, according to Andy Smith, the executive director of financial planning in the Indianapolis office of Edelman Financial Engines.

A survey commissioned by Edelman Financial found that at least 44% of respondents said they only think about taxes during filing season. (The survey included 1,500 adults over 30 years old, with an oversampling of respondents aged 55 or above, with more than $100,000 in assets.) More than half, 52%, believe they’re missing opportunities for savings and a wealth boost from tax planning, while only 16% graded themselves with an “A” in that area and 42% said they were at a “C” level. Meanwhile, Edelman Financial’s planning and software for tax-optimized retirement drawdown strategies identified more than $1 billion in possible savings for a pool of 4,000 clients between January 2023 and Feb. 20, according to the firm.

“What we found is that there are a lot of people failing to realize that these are year-long conversations that likely need to be had,” Smith said. “It’s already a stressful time. Now you couple that with feeling like you’re missing something.”

READ MORE: Taxes + wealth: 2 connected but still (for now) distinct fields are merging

Tax questions take longer than a form

The savings that they’re losing out on could include openings to a capital gains rate of 0% if their annual income falls low enough in retirement, the avoidance of taxes or penalties tied to Social Security or Medicare benefits or the use of loans that are duty-free with the help of a home or another asset as collateral, Parham noted.  

“There are all these things that happen where people are just unaware,” he said. “The longer I’ve done this, the more I’ve seen that there really is a gap.”

Edelman Financial carries out its tax planning for clients’ retirement as “a one-size-fits-none approach” that plays out over decades after thoughtful planning that takes much longer than the filing season, according to Smith. Planning for traditional individual retirement accounts, possible Roth conversions, strategies for required minimum distributions, any possible pension questions, the client’s cash flow needs in retirement and accompanying tax analysis over every aspect of the equation yields those savings to customers, he said. In other words, the traditional 4% rule for retirement drawdowns just won’t cut it.  

“This isn’t necessarily a product — it is part of a process where people can find themselves, and then it’s also modular and changeable,” Smith said. “It’s trying to get your arms around, what do you have to do, what would you like to do and what’s that pie-in-the-sky stuff? … We spend a lot of time building that cash flow and retirement plan, then we do an overlay with that tax analysis.”

READ MORE: Advisory practices aren’t meeting clients’ tax demands, study finds

Cultivating CPAs referrals without hitting the wrong notes

To be sure, tax season still poses demands that leave many CPAs feeling “just overwhelmed, super stressed and they don’t have a lot of time,” Byrnes said. So advisors could send over some food or drink with a friendly note telling the tax pro, “‘Hey, I know you have a lot on your plate right now, and I just want to help you get through it,'” he said. An invitation to celebrate the end of filing season could be effective as well. 

Outside of tax season, advisors may lend a marketing advantage to a CPA by inviting them on a podcast, interviewing them for a written blog or social media video or holding a webinar or in-person event to discuss certain strategies or common questions.

“A new advisor doesn’t have a lead to exchange, so that’s where all those marketing tips can be really helpful,” Byrnes said.

Surveys on either side of the equation could identify the CPA customers’ satisfaction with any wealth management company they use or the degree that the advisors’ clients see their tax needs being met.

“Imagine you’re coming out of tax season. As an advisor, you know that a third of your clients are unhappy with their accountants because you did this survey,” Byrnes said. “It’s a great way to exchange leads.”

But some advisors “struggle to connect with CPAs” because they “have to have the knowledge, you have to acquire the experience, you have to build the relationship with the accountant and recognize that they’re super busy,” Parham said. Part of that is understanding the risks to CPAs or other tax pros that the advisor “could make their life harder and hurt the client,” he said. 

While there are sometimes financial arrangements based on asset levels or the number of clients, the suggestion of one could backfire on advisors as well.

“It’s, ‘You send people, I send people,’ and everyone’s happy. The vast majority of those relationships are informal and sporadic,” Parham said. “A lot of accountants, it actually turns them off if you offer to pay them. If they’re getting paid to refer, it feels gross, and now they don’t want to do it as much.”

Considering that some are claiming that artificial intelligence could bring us biological immortality by 2030, it would not seem like a major leap for some to think it could independently complete an advisory engagement end to end without any human input today. While this is not actually the case, those who fervently believe this to be true may be less likely to call their human accountants when, in their mind, a chatbot would do just fine. 

Joe Woodard, head of accounting coaching and education firm Woodard, said that this is part of how AI is slowly eating into accounting advisory services. The threat is not so much that the boss replaces everyone with an AI chatbot, but that the client decides an AI chatbot is good enough for their purposes and so never calls their accountant in the first place. 

“Among ChatGPT adopters — which, let’s remember, is still a small percentage of the business community — people are asking AI first. If they have gray areas or need a judgment call, then they reach out to their CPA … . This is how AI is undercutting the value proposition of accountants. CPAs are increasingly becoming a second opinion rather than the first source of expertise,” said Woodard. 

(See our feature story, “Staying ahead of AI.”)

This is a bad idea for several reasons. One is the obvious fact that the less a client calls their accountant, the fewer opportunities there are to offer the services that keep firms running. But there is also the fact that people think AI can do things it simply cannot do today, which can lead to poor decisions that could have been averted if only they’d consulted their human advisor. Hannah Dameron, an estate attorney with ArentFox Schiff who has spoken at accounting conferences on how AI is impacting her field, noted that people who try to draft wills using AI might be very disappointed when they test it in court. 

“If you put in a ‘Draft a will for me’ type of prompt, it might not actually be appropriate for your situation and might not be up to date depending on when tax laws have changed or probate laws have changed. So I think there is still great value in working with [human professionals]. AI just might create a challenge in communicating that with the public more broadly,” she said. What is needed is, first, education on what exactly AI can and cannot do. Media portrayals have given people the impression that AI is close to fictional entities like Iron Man’s Jarvis or 2001’s HAL 9000, which simply does not match reality. And even when bringing things a little closer to Earth, people still may not realize that, as powerful as AI is today, it still comes with real limits that require human compensation. 

“Right now, all we have is narrow AI, which means AI can answer highly specific questions. For example, if I ask, ‘What should my firm’s headcount be?’ AI can generate an informed response. But it can’t yet think holistically like a human does — it can’t ask leading questions, collect relevant information beyond the prompt, or make judgment-based decisions. AI can provide an analysis, but it’s not an advisor,” said Woodard. 

David Zweighaft, a partner with RSZ Forensics, added that clients need to be aware that AI can be biased and, in the case of generative solutions clients might access via public models, extremely inconsistent. Given that generative AI works on a probabilistic basis, by necessity if you give it two different prompts you can get two different results. “We need to be able to look at AI-generated output either that we commissioned or that the client has relied on and say, ‘OK, here’s the same data set; let’s run this through a different AI platform and see if you get the same results.’ … We can use AI to do that just as a safety check for us,” he said. 

David Nelson, an estate planning specialist with Top 25 Firm Aprio, said that ensuring that accountants remain the first opinion, not the second, means being proactive. Professionals should not be waiting around for their clients to call them, and then lament that they’re using a chatbot instead. They should be taking initiative to reach out in response to changing circumstances that might affect them. 

“For example, if a client’s net worth is rising rapidly and there’s potential for increased estate tax, it’s important that our colleagues in other departments plant the idea: ‘Hey, you might want to talk to our estate planning team.’ That way, clients aren’t suddenly faced with estate planning questions and turning to the internet for answers instead of calling us. It’s about being proactive,” said Nelson. 

He said that misinformation has become a challenge, as he has had clients coming in with ideas they got from ChatGPT or other tools, which he said can have outdated information. Chatbots might bring clients a rough approximation of an answer, but it may lack nuance, and so it is on professionals like him to explain the complexities. Still, it is better for clients to come in and have this talk than to simply accept the AI answer and not come in at all.

“That said, I don’t mind if a client comes in with their own idea. I haven’t personally encountered resistance when explaining why an AI-generated response might not fully address their needs. But AI’s growing presence in society means we’ll likely see more of this,” he said. 

Lari Masten, a valuation specialist who heads Masten Valuation, raised a similar point. She talked about a client who relied on an AI’s answer, much to his own detriment. She said it’s not so much that he didn’t want to call her at all, but it was the weekend and he was under intense time pressure, so he consulted a bot instead and went with its suggestion. 

“And then later in the week, I hear from him and he’s like, ‘yeah, by the way,’ and what he did was not what I would have ever recommended. And I said, ‘I wouldn’t necessarily have recommended that because here are the other things that you weren’t considering, right?’ and it was thankfully not something that was a costly thing for him, but he was just like, ‘My gosh, I didn’t think about that,'” she said. However, while she acknowledges that hers might be an unusual position, she doesn’t mind if people refer to AI on simple matters that are easily looked up online and save the complex stuff for her. She’s not eager to spend all day answering basic questions when she could be doing higher-value work. “I don’t have any issue at all, to be honest, with a client that has a question, but they can go ask chatGPT or whoever they’re using. Because if it’s something simple and they can get the answer, that’s great. Because that frees me up; I can do better work. I can do higher-level stuff. I mean, I don’t want to be answering things like, ‘What’s the maximum amount that I can get this year?’ Go look it up. That’s easy, so I’m fine with that because then that makes my conversations with clients more meaningful,” she said. 

(Read more: “AI in advisory: What work is at risk?“)

In both Masten and Nelson’s cases, they leveraged existing relationships to prove their value proposition as human professionals. Woodard said that this is ultimately what accountants will need to do if they want to remain the first opinion, because if their idea of advisory consists of just handing people an analytics report, there’s not much of a relationship to utilize, and AI will indeed start eating into their client base. This was always a good idea, but Woodard said that now it is essential. 

“AI will not disrupt advisory that is built on relationships, strategic insight, and deep business understanding. If your advisory work is truly advisory — guiding clients through long-term decision-making — it will endure. However, if your advisory service is transactional or just financial reporting with a cover sheet, that is highly disruptable. Our thought leadership has aligned around this: Advisory must take place in the context of a relationship. It must be strategic, rather than transactional. Up until now, that was a best practice; going forward, it will be a necessity for survival,” said Woodard.