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There are advantages in having holistic wealth management practices. The more services an advisor can offer under one roof, the more likely it is clients will be satisfied and retained. After all, convenience, particularly when accompanied by good service, is worth its weight in gold.
One the road to holistic, a couple of important points are worth remembering. First, advisors shouldn’t be in a hurry to get there. Moving too rapidly can lead to costly, time-consuming mistakes. Second, when it comes to adding services that currently aren’t offered in-house, consider the ones that are most in demand by clients, including tax services.
Yes, Tax Day is just a month away, but providing related services is relevant to many clients on a year-round basis. For the advisors that currently don’t have tax planning on their menu, it could be worth filling that void by establishing relationships with local CPAs and tax pros. Sure, the potential for referral revenue exists, but more importantly, it could be a client attraction/retention tool.
That’s particularly true with younger clients, many of whom feel daunted come tax time.
Gen Z Definitely Needs Tax Help
While the bulk of Gen Z is not yet in the workforce, this is still a coveted demographic for advisors and the good news data confirm this generation wants to work with financial professionals.
An effective way for advisors to make inroads with Gen Z, potentially creating long-lasting relationships in the process, is via tax services. That proof is in the pudding. A recent survey by TurboTax indicates that of the 2,000 18-26-year-olds polled, 56% feel intimidated by doing their own taxes.
Some other statistics underscore just how negatively filing taxes are viewed by Gen Z. Thirty-seven percent said they’d rather watch TV than do their taxes while nearly a third said cleaning their homes sounds more fun than filing taxes, according to TurboTax. Another 21% said they’d prefer to go to work over dealing with taxes.
Further cementing the notion that providing tax services to Gen Z or at least pointing them in the right direction is advantageous to advisors is the point that two-thirds of those queried by TurboTax didn’t realize they can still get a federal tax refund even if they don’t meet the IRS income requirement.
One Gen Z Point to Ponder
If there’s one thing that advisors do know about millennials and Gen Z, it’s that these groups are extremely technology proficient. But one of the downsides of that scenario is that both demographics have tendencies to get financial information from some suspect sources.
That’s true of Gen Z when it comes to tax advice. Seventy-seven percent get such advice from family and friends, which is fine assuming those folks are CPAs, but chances are they aren’t. Another 31% turn to social media for tax advice, observes TurboTax.
Bottom line: Gen Z needs tax help and they’re getting it from dubious places. Advisors can and should fill the void because the long-term rewards are compelling.
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