Inside the German CPA Mindset: Tax, Succession & AI | Dan Pascone with Patrick Kempf | Ep #14

Patrick Kempf is a German CPA and tax adviser with an MBA. He says he started his career at a Big Four firm, spent time in the U.S. and Asia, joined his current mid-sized tax and audit firm in 2018, became a partner in 2019 and became a majority equity partner at the start of this year. He was Tailored Wealth's first international podcast guest.

He says the firm has roughly 60 employees and serves small and medium-sized companies, often family businesses, with annual revenue of about €1–50 million. He describes a holistic approach that covers tax, future planning and succession planning for the companies, plus tax and financial questions for the owners themselves.

Patrick says the ideal client is a service or manufacturing company with a solid balance sheet and steady growth, usually owned 100% by the founder or by a family across several generations. He says the firm handles monthly accounting, bookkeeping, payroll, financial statements, business plans and forecasts. It also helps with bank financing for new projects and with financial and tax due diligence when a client acquires a company. On the personal side, he says the team prepares owners' income tax returns and works with their financial advisors on investments.

He says the firm has been around for 50 years, has always been mostly family-owned, and that he's the 2nd generation in the firm. His view is that having real skin in the game, including owning the office building, helps the team understand the decisions clients face. Dan said he built Tailored Wealth around the same idea: he used to be an executive-level leader and is now an entrepreneur, so he can relate to both groups he serves.

Patrick says a major challenge for German companies is a shortage of labor, with many baby boomers retiring, and that it has become more severe over the last 3–4 years. He also mentions supply chain disruptions. He says clients respond by using software and AI, recruiting from wider European and non-European labor markets, streamlining their organizations and using their existing capacity more efficiently. He says his firm helps by digitalizing and automating accounting so owners can focus on operations.

On his own industry, he describes accounting and tax as steady and says there has always been a need for it. He expects less manual work and more AI in monthly accounting and compliance, freeing time for consulting. He notes that many tax advisers in Germany are in their early 60s and nearing retirement, that small practices of 5 or 10 employees that haven't digitalized could be overtaken or acquired, and that he expects consolidation, with private equity investors already preparing to change the market. [VERIFY: guest opinion about industry trends] Dan agreed that AI could change the game for manual work like tax returns if it's trained and used well.

Patrick says most new clients come from recommendations by existing clients, which he calls the firm's number 1 source of new business. He adds Google search, some LinkedIn outreach and, to a lesser extent, social media. He also gets referrals from banks, notaries and lawyers, including private banks that serve high-net-worth individuals and, sometimes, investment banks, usually when they already know the firm or see a fit with its industry expertise.

Looking ahead, he says the firm has already brought in the next generation at the partner level, with 1 partner at 57 and a new equity partner in his early 30s joining later this year, plus a healthy age mix among employees. He wants to keep a mix of older and younger clients, continue the firm's specialization and apply AI where it makes sense.

• Coffee or tea: Tea, usually green. He says he doesn't drink coffee at all, which he jokes is unusual for a CPA.
• Cats or dogs: Dogs.
• Technology he can't live without: The iPad, and AirPods.
• Favorite quote: "Money is made by money," meaning compound interest. Dan added the "eighth wonder of the world" line often attributed to Einstein, though the origin is unverified. [VERIFY]
• Favorite book: Never Split the Difference by Chris Voss, about negotiation.
• Personal hack: Arriving at the office early to review his schedule and clear emails before client meetings, clearing his inbox again in the evening and forwarding tasks others can handle.
• Bucket list item accomplished: Completing his professional degrees and becoming a partner at a relatively young age.
• Current milestone: The partnership transition his firm completed earlier this year, with the next generation, clients and employees on board.
• Advice to his younger self: Invest as early as possible, even with small amounts, and increase them as soon as feasible so the money can work.

• Tax and planning decisions shouldn't happen in separate rooms: Dan called the CPA and financial advisor partnership critical for a holistic approach. Equity awards, retirement contributions and charitable giving all have a tax side and a planning side. Our post on virtual family office services looks at what a coordinated team can look like.

• Ownership of your advisors can change: Patrick expects consolidation and outside investors in his profession. Whatever industry you're in, it's reasonable to ask how a professional's firm is owned and how they're paid.

• Foreign rules aren't U.S. rules: Nothing here is German tax advice, and German and U.S. systems differ. U.S. taxpayers with accounts, businesses or family ties abroad can face additional reporting requirements, so they should work with a professional experienced in cross-border situations.

• "Invest early" is a good start, not a full plan: Time in the market can help because gains can build on gains, and the SEC's investor.gov glossary explains compound interest. But returns aren't guaranteed, and fees, taxes, inflation and losses compound too.

This hypothetical is for illustration only. All figures are assumed, aren't projections or recommendations, and ignore taxes, fees and inflation. Returns aren't guaranteed and can be negative.

Assume 2 executives each invest $2,000 a month until age 65 and earn an assumed 6% a year, compounded monthly.

• Executive A, starts at 40: Contributes for 25 years, or $600,000 in total, which grows to about $1,386,000 under these assumptions.
• Executive B, starts at 50: Contributes for 15 years, or $360,000 in total, which grows to about $582,000.

In this example, Executive A contributes $240,000 more and ends up with roughly $804,000 more. The gap comes mostly from the extra 10 years of growth. Real results will vary, and a market decline early on could change the picture. The practical point is that for someone in their 40s or 50s, starting now still matters, and the amount you save and the risk you take matter just as much.

We use Life-Driven Planning, a 6-phase plan covering Cash Flow, Retirement & Hybrid Retirement, Risk, Expense & Goal, Tax and Legacy. The Tax phase is where we coordinate with your CPA so that decisions about equity, retirement accounts and giving are made with both views in mind. Life Driven Investing (LDI) builds a portfolio backward from your life using the Four Liquidity Bands: 0–2 years, 3–5 years, 6–10 years and 10+ years. Our video on asset location and your 401(k) shows how where you hold investments can affect taxes.

For executives with RSUs, options or an ESPP, our Equity Compensation Playbook, a set of structured rules for those awards, helps us plan the timing of sales and taxes with your CPA. Under our Quarterly Strategy Rhythm (ongoing plan updates, decision reviews and rebalancing), we revisit the plan on a schedule. This episode is educational and isn't an endorsement of Patrick's firm or any company, book or strategy discussed.

This episode is for corporate executives, senior professionals and business owners in their 40s and 50s with $500k+ in household income and complex compensation who want their tax and planning professionals working together, and who want to understand how succession, technology and long-term investing fit into the bigger picture.

If you're a high-earning executive or business owner who wants your tax and financial decisions working together, we'd be glad to talk it through. Book a free Wealth Strategy Call with us, and we'll look at your situation together.