I'm confused

I’m having lunch with two CPAs. Ten plus years experience each. Work for a mid-tier firm dealing with entertainers and athletes. I guess that is redundant. Anyhow, they knew nothing about a hedge fund. Qualified investor, nope. 2 and 20, yeah, good luck. Treasury bill - their response, “What’s that?” I said a short-term “bond” issued by the government. “Oh.” I was trying to illustrate how most investors historically would have been better off investing in treasuries. They initiated the conversation and the lunch. Apparently, they’ve noticed a lot of their clients are invested in these strange things called hedge funds. I left dumbfounded. Did I enter the twilight zone or is this type of ignorance typical of the field and I should not be surprised?

I never understood why people conflate what CPAs do with what CFA-types do. Night and day. Yes, they are both “financial professionals.” Yes, they both “work with numbers.” But the CPA has no more in common with what I do in investments than with any other random line of work.

+1 for what terminator boy said.

also G, you sound like you live in middle America so that’s probably part of the reason the CPAs you met didn’t have a clue

+1 to the gringo. feels like a regional thing. lots of sharp CPAs (and a fair few CPA+CFAs) up hizzle.

Sounds like some thrilling lunch conversation.

I’m with Ghibli here. Although CPAs are not investment professionals, I would expect them to have at least a basic knowledge of the financial markets. How do you get through an undergraduate accounting degree with at least hearing of treasuries?

In order to be fair, a lot of CPAs (including one that works down the hall from me) don’t know, nor do they care about financial markets. Their responsibility begins and ends with the tax return. If you ask them a question, the first thing they will think about is “How does this manifest itself on the tax return?”

I even heard a CPA the other day tell a client “Well, if you don’t get a deduction for the IRA, there’s no point in making the IRA contribution.” (Facepalm)

I’m not saying these guys are dumb or incompetent–it’s just not their expertise, and they choose to stay within their (very small) circle of competence. Hedge funds and treasuries are what brokers are for–not CPAs.

in my experience, all CA/CPAs that i’ve met know plenty about investments but this is likely because they are the cream of the crop of canadian accounting. the CMA/CPAs and CGA/CPAs i’ve met aren’t too bright. i know a CMA/CPA with 30 years experience who doesn’t have a clue about the math behind compounding or how different investments are taxed. hmm. at least in canada we know which CPAs are going to be idiots.

I don’t think this is due to product specialization. I think these guys just sound weird.

But unless my judgment is limited to my own perspective, what is a concept from CPA (or other) universe, that I would not know, but is considered extremely basic within that field?

Their office serves the richest zip code in America ranked by average income and household networth according to Bloomberg as of a few years ago. “Sounds…middle America.” Is there a term for what you suffer from? Maybe “regionalism?” Just basic intellectual curiosity would have caused me to be familiar with my client’s assets if I was a CPA. I guess they finally tried to educate themselves. They asked me. An Internet search would have been quicker and they would not have had to buy me lunch. But, like Greenie implied. Not their job. Doesn’t make them more money to expand their knowledge base beyond the tax form i guess. It gets more interesting though, they do try to provide some budgeting advice so these athletes don’t go broke, i.e. maybe fly first class instead of chartering a jet. So the firm is doing more than just taxes. I lost interest though. Didn’t seem that I was going to learn much.

This just sounds like a great place for Greenie, CPA, CFA to set up shop. Ripe for the picking.

sounds like this stuff should be part of the CPA continuing education curriculum

The fact is that most CPAs have very little educational background in “Finance / investments” to coincide with their work experience. Most CPAs have to take 1 or 2 introductory Finance courses as part of their education requirements (focus is on Corp Finance). Their investment knowledge is usually related to how it is reported on a tax return.

ok so new ranking

CFP > CFA > CLARITAS > Series 7/66 > CPA

We prefer Middle-Earth.

that atush guy is gonna go bananas

I’d have as much luck answering tax-related questions as a the average CPA would answering hedge fund questions.

Wrong, you did not put Indian CA anywhere on the list.

What about first-time givers of the CFA, surely that merits some position on the pantheon of glory

Excellent point. They are just above the FTGCFA who ask us to please advise strategy.