As trusted financial advisors, Certified Public Accountants (CPAs) play a crucial role in guiding their clients toward making sound financial decisions. Traditionally, CPAs have focused on tax preparation, auditing, and financial consulting. More and more, though, they are introducing clients to alternative investment opportunities.
One such opportunity is investing in private mortgage funds, such as the EP Guardian Fund managed by Enact Partners. A private mortgage fund can offer attractive returns, diversification benefits, and stability to investors.
What is a CPA?
A CPA is a professional who has met specific education, experience, and examination requirements set by a state board of accountancy. CPAs are highly trained in accounting, tax, and financial matters, and they adhere to a strict code of ethics. Their expertise is invaluable for individuals and businesses seeking financial advice, tax planning, and assurance services. CPAs are trusted advisors who help clients make informed decisions that align with their financial goals and compliance requirements.
Who Are CPA Clients?
Much like the borrowers and investors who work with Enact Partners, CPA clients come from diverse backgrounds and have varying financial needs.
- Individuals and Families—These clients typically seek personal financial planning, tax preparation, and estate planning services. They might be looking for ways to grow their wealth, minimize tax liabilities, and plan for retirement.
- Small and Medium-Sized Businesses—These are businesses whose owners require assistance with bookkeeping, tax compliance, financial statements, and strategic business planning. They often seek advice on optimizing cash flow, managing expenses, and securing financing.
- High Net-Worth Individuals—These clients have substantial assets and require sophisticated financial planning, investment management, and tax optimization strategies. They are often looking for investment opportunities that offer higher returns and diversification.
Investors in the EP Guardian Fund tend to be retired individuals, couples, and businesspeople who are seeking sound investment opportunities focused on asset protection and growth through consistent monthly cash flow. Our investors must be accredited. Individuals must have earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years and reasonably expects the same for the current year, OR a net worth of over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
What is a Private Mortgage Fund?
A private mortgage fund is a type of alternative investment vehicle that pools capital from multiple investors to finance private mortgages. These mortgages are typically short-term loans secured by real estate properties.
The EP Guardian Fund is a private mortgage fund managed by Enact Partners. It offers accredited investors stable monthly cash flow with a focus on capital preservation. The Fund offers an opportunity to invest in a diversified portfolio of short-term loans secured by commercial real estate, non-owner occupied residential, construction, fix and flip, mixed-use, and similar properties across the western United States—without investors having the responsibility and stress of managing real estate assets.
Adding Value for Clients
CPAs can add significant value to their clients by introducing them to private mortgage funds and helping them understand the potential benefits and risks associated with this type of investment.
- Risk Assessment and Diversification—One of the key roles of a CPA is to assess the risk tolerance of clients and recommend appropriate investment strategies. Private mortgage funds can be a valuable addition to a diversified investment portfolio, offering exposure to real estate without the need for direct property ownership. They provide an additional layer of protection by being less correlated with traditional markets, and because they spread investments across different asset classes, they tend to weather market downturns well, reducing portfolio volatility.
- Due Diligence—CPAs can conduct thorough due diligence on behalf of their clients to evaluate the credibility and performance of private mortgage fund managers, like Enact Partners. This includes reviewing historical performance and management experience. For example, as manager of the EP Guardian Fund, Enact Partners has delivered annualized yields between 8% and 11%—with no losses—since the company started in 2013.
- Tax Implications—As experts in tax planning, CPAs can help clients understand the tax implications of investing in private mortgage funds. This includes evaluating potential tax benefits, such as interest income deductions and capital gains treatment. In some cases, interest payments from private mortgage funds can enjoy preferential tax treatment, allowing clients to retain more of their earnings. Diversification also enables tax-loss harvesting, where losing investments can be sold to offset gains, reducing tax liabilities.
Let’s Talk About How We Can Add Value for Your Clients
By introducing clients to alternative investment opportunities like private mortgage funds, CPAs can add significant value to their financial planning and investment strategy services. Let’s explore how investing in the EP Guardian Fund could help your clients grow and protect their wealth, optimize returns, and create a more diversified portfolio.
(760) 407-3045 | [email protected] | www.enactpartners.com
