JOHN D. HOUSER: THESE ACCOUNTANTS HOPE 1+1=10

Two heads are better than one when accountants get into money management.

Two firms in Atlanta, Miller Ray & Houser Business Advisors and CPAs and Bennett Thrasher & Co., joined forces in January to manage money for their clients. They set up a separate company called CPAdvisors LLC, a registered investment advisory firm to which they are referring customers, and hired a manager.

The firms are following a trend that has been gaining momentum over the past few years as accountants across the country branch out into money management services. Competition from brokers getting into their business, and the low profit margins of the tax-preparation business, are forcing accountants to provide an array of financial services.

“A lot of people are thinking about doing this,” says John D. Houser, managing shareholder for Miller Ray & Houser. “For every million dollars of CPA business, there’s a certain amount of investment management business you should be able to accumulate.”

Indeed, demand among CPAs for information on investment services is so great that their national association is forming a special program.

Joel Allegretti, a spokesman for the American Institute of Certified Public Accountants in New York, says the group polled members on the topic last year. “Based on that survey, we made the decision that an investment advisory services program was something we wanted to start,” he says.

Mr. Houser says the new venture with Bennett Thrasher is especially appropriate because the two accounting firms have similar client profiles.

Both serve the wealthy and small and midsize companies. Between them, they have 80 employees and combined annual billings of about $8.5 million.

CPAdvisors “won’t interfere with our regular business,” Mr. Houser says. “The economies of scale made sense.”

CPAdvisors, which manages about $10 million so far, is headed by Dixie Anderson, who is also a partner in the new venture. For now, she runs the operation with a single clerical worker.

Ms. Anderson, 51, has been an Atlanta-based money manager since 1974. In 1982, she co-founded Astrop Advisory, which ran money for Fortune 500 companies. In 1989, she sold her interest in the firm and began Anderson Advisory, which served high net-worth clients. She closed that firm, and brought clients with her, when she became a partner in CPAdvisors.

counseling, trading too

CPAdvisors handles investment counseling, as well as individual securities trades and no-load fund investments. “Initially, we’re following the concept that the partners will soft-sell this to our clients” in the CPA firms, Mr. Houser says.

Ms. Anderson declines to discuss her personal investment philosophy, saying every client’s portfolio will be managed to the liking of the client.

Ken Thrasher, co-managing partner at Bennett Thrasher & Co., says his firm joined forces with Miller Ray & Houser to form CPAdvisors after each firm had independently studied the possibility of starting a money management operation for several years. Finally, during a conversation, he and Mr. Houser compared notes on their projects. “We said, ‘Why don’t we combine resources, and do it better?’ ” Mr. Thrasher says.

Partners in both CPA firms are now in their late 40s and early 50s, and many of their longtime clients are in the same age bracket. Mr. Thrasher says he had previously referred clients to outside sources for money management advice.

“They’re asking, ‘Help us decide what to do.’ They come to us because we’re the people they ask that kind of question,” Mr. Thrasher says.

This is the second joint venture between Miller Ray & Houser and Bennett Thrasher. In 1996, they formed Retirement Plan Services Co., which offers pension advice and retirement plan administration to small and midsize companies in the Southeast. The company’s turnkey 401(k) operations have grown to include 70 plans with about 4,000 participants and about $50 million under management.