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Everyone is thinking about takes as April 15th rolls around. Clients are conscious of the cost of making money when they are tallying up their gains ands losses. Let us assume your client works with a tax professional. As their advisor, what conversations should you be having with your client beforehand?
Let us start by considering their CPA as a potential ally, not an adversary. You should be thinking of opportunities, not taking on a defensive ;posture.
1. Does your client have a good accountant? They probably do, but it is worthwhile to ask. Do they file their own taxes? Has their situation become more complicated as the years pass? Confirm they have a good accountant. Be prepared to offer several recommendations if the answer is no.
2. When will those 1099s be available? Years ago, the “magic date” was January 31st. Today, the firms are allowed to send them out in four tranches, starting January 31st and extending to March 31st. Let your client know what they can be expecting and when.
3. What has your client paid your firm in fees? Expect this to come up in their 1:1 conversation without you present in the room. This should include both direct and indirect fees, even if they are not visible. If their accountant brings it up, it is good you addressed it first.
4. What value do you bring to the client relationship? Their accountant might mention the fee number, followed by “What do you get?” Remind them of the services you provide, starting with financial planning. Highlight your different periodic reviews, their focus and frequency. That’s a good start.
5. How many financial services firms does your client use? It can be frustrating when you are waiting for firms to send out their tax documentation paperwork. Assuming your firm is good at getting this done, you might make a case fore “one stop shopping.” Suggest your client might consolidate their assets at your firm. Will they be eligible for discounted fees if their assets surpass a threshold?
6. What advice has their accountant offered? They might have suggested an additional retirement plan for their side business. Maybe they suggested earning tax exempt vs. tax free income. What portion of their advice can be put into practice at your firm?
7. Have you met their accountant? This is not happening before April 15th. Accountants have other deadlines too, but things eventually calm down. Would your client be agreeable to introducing you to their CPA? Would they be agreeable to meeting you? If their CPA is impressed by your thoroughness and ethical approach, they might become a referral source. If your CPA is not in the financial planning business, they might have clients who really need a better advisor.
When tax time rolls around, you want to be an ally, not an obstacle to your client’s accountant.