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How and Why to Add Measurable Value with Tax-Focused Financial Planning

  


At the Alliance of Comprehensive Planners, we’re of the firm belief that tax-focused financial planning is an essential part of financial planning services. ACP operates under a fee-only
retainer-based model that helps advisors deliver the best customer experience possible. 


In this presentation on tax-focused financial planning, we discuss the basics of tax-focused planning, along with strategies financial planners can use to create clear value and help their customers.

Why offer tax planning services

Offering tax planning services works to set you apart from the competition, deliver value to your clients, and help you adhere to the fiduciary standard.

Differentiation

While we consider tax planning to be an important part of the financial planning process, not all financial advisors offer tax planning. Offering this service is a way to differentiate yourself from other financial planners and expand your services to serve more customers.

Retention

Offering tax planning services can also help you to increase client retention by providing increased value to your clients. Proper tax planning can strengthen your relationship with your clients by deepening your understanding of their financial situation, as well as saving them a significant amount of money each year.

Fiduciary standard

As a financial advisor, you should always strive to meet the fiduciary standard to the best of your ability. Making financial decisions that are in your client’s best interest include advising them on tax-related matters. Offering tax planning services can help you to adhere to this standard when serving your clients.

Why clients need tax-focused financial planning

There are plenty of client benefits when it comes to tax-focused financial planning.

Tax planning is part of an integrated financial approach

A successful approach to financial planning is anticipatory, active, and dynamic. Instead of viewing tax preparation and filing as a once-a-year task, tax-focused financial planning consists of ongoing attention throughout the year. It also leads to holistic financial planning. This sustained approach can help improve clients’ understanding of their tax situation and uncover new opportunities for financial success.

Clients engage in complex activity

It’s no secret that clients often engage in complex financial activity, which can have significant implications come tax time. Examples of complex activity that would benefit from tax planning include:


  • Owning real estate
  • Operating short-term rentals
  • Business owners
  • Freelancers and the self-employed
  • Beneficiaries of trusts
  • Clients who inherit money
  • Clients who receive stock compensation

Offering tax-planning services is especially important for clients with complicated tax situations, but it’s a good idea for clients no matter how simple or complex their financial activity.

What you do now, better

Offering tax planning services doesn’t have to be a radical departure from the services you already offer. Instead, tax planning is best viewed as complementary to other financial planning services like retirement planning and investment advice. A full suite of financial planning services can include:


  • Cash flow management
  • Retirement planning
  • Tax-advantaged savings
  • Concierge services
  • Investment advice
  • Tax planning

How to offer tax-focused financial planning

Whether or not you’re able to offer full preparation and planning depends on whether you meet certain qualifications. If you’re not qualified to prepare taxes yourself, you can still offer tax planning services and advice. You can also work with a third-party preparation service to manage your clients’ tax preparation.

Full preparation and planning

If you’re licensed and able to provide tax preparation services, you can offer both tax planning services and full tax preparation for your clients. This integrated approach allows you to oversee every aspect of the tax process and encompasses both long-term and short-term tax-focused financial planning. It also allows you to be a one-stop shop for your clients when it comes to tax-related services.

Third-party preparation

If you’re not able to offer tax preparation services yourself, another option is to partner with a third party for preparation. This can mean working with a CPA local to your area or another third party that you know and trust. While it can require a little bit of work up front to find the right third-party partner, this approach also helps you to provide added value for your clients.

Tax planning with no return preparation

Even if you’re not able to offer any tax preparation services for your clients, you should still offer tax-focused financial planning. Tax planning can help to ensure that your clients are informed and prepared when it comes to tax time.

How ACP can support your journey

Good financial planners understand the impact of income taxes in the financial planning process. By offering tax-focused financial planning services, you can integrate tax planning more closely into your practice to create value for your clients and build better client relationships.


Here at the Alliance of Comprehensive Planners, we understand just how important it is to provide a robust selection of services for your clients. Whether you’re building a new practice or transforming an existing one, membership with ACP gives you access to the tools, processes, resources, and support to become a more effective comprehensive financial planner. 


Schedule a call with us today to learn more about ACP and how we can help your business!



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