As the saying goes, “Nothing is certain except death and taxes.” But is that true at your firm? If tax planning isn’t part of your offering, it could be time to reconsider. Tax planning is quickly becoming a game-changer for financial advisors — and for good reason. As more advisors shift toward holistic planning, adding tax planning to your services isn’t just a smart move — it’s an accessible, lucrative way to provide even more value to your clients. The best part? It often takes just a few additional data points to get started. Tax planning isn’t about filing returns; it’s about proactively finding tax-saving opportunities and collaborating with clients’ CPAs to maximize their financial well-being. If you’re looking to elevate your client service and grow your business, tax planning could be your next big opportunity. Here are three reasons why you should consider adding tax planning services to your firm.
Clients Want Convenient Tax Planning
Business 101: If customers want a product, you should offer it.
Investors are increasingly looking for holistic advising to coordinate all financial, insurance, and legal aspects of their lives in one firm. Taxes play a central role in all of that.
One recent survey found that 92% of investors expect their advisors to provide tax planning advice, but only 25% of those clients are actually getting the service. Clearly, there’s a huge demand for advisors who understand taxes and can provide personalized, relevant tax planning services.
Offering tax planning can set your firm apart and create a strong competitive advantage. As more advisors offer tax planning and other services, don’t risk getting left behind as clients move toward holistic advising and planning.
Expand Your Client Base
Tax planning services can help clients and provide great growth opportunities for your firm. Not everyone is ready for an extensive wealth management strategy or financial plan, but everyone pays taxes and needs help planning. By offering tax planning services, you expand your potential client base. Once you have established tax planning clients, you can move them into investment clients when they’re ready.
The industry is moving toward tax planning. According to one study, 86% of financial advisors believe quantifying and reporting to clients the ongoing effect of tax management is essential to growing their financial advice business.
Taxes aren’t a one-time thing around tax time; they provide opportunities for year-round connection. When advisors help their clients think about taxes throughout the year, they can look for opportunities to increase their investments and reach their financial goals — increasing your firm’s assets under management for continual growth.
Deliver Better Financial Recommendations
Taxes are tied to nearly every financial decision. When advisors are more aware of a client’s tax plan, they can deliver personalized financial recommendations that consider all aspects of their financial lives.
Tax planning allows advisors to plan and execute tax strategies for the current tax year and the years ahead. Through tax planning, advisors can consider the tax consequences of their recommendations to provide the most well-rounded financial approach. Instead of looking at one area of a client’s financial life, such as their retirement accounts or investments, advisors can consider all elements for more robust advising.
By offering tax planning, advisors can help clients make smart choices that will impact not only their long-term financial goals but also their tax returns, so there won’t be any surprises when they try to withdraw or change accounts. When advisors have the full picture of a client’s finances and tax returns, they can make investments work in tax-conscious ways, such as tax-loss harvesting, asset location, and tax-efficient withdrawal strategies. This comprehensive view ensures clients are in the best financial state and that all areas of their financial life work together.
As an advisor, adding tax planning to your suite of services is a natural and valuable extension of the work you’re already doing for your clients. It’s a lateral move that makes perfect sense — often, it’s just a handful of additional data points you need to gather to start providing this essential service. PreciseFP makes it easy to collect that data, whether you use our customizable forms or leverage our pre-built tax planning checklist to begin the conversation with your clients.
