When new clients meet their advisors for the first time, they have certain expectations. Unfortunately, more often than not, clients walk away from those initial interactions disappointed that their financial advisors don’t offer the services they expected. The gap between expectations and reality can be stark. For example, 92% of clients hope to receive tax planning advice from their financial advisor, but only 25% receive it.
Financial advisors who don’t prepare taxes may be surprised to learn that offering tax advice to their clients may be much simpler than expected. A recent webinar hosted by Nora Gallegos of PreciseFP and Torie Happe of Holistiplan demonstrated how a simple workflow combining client engagement and data gathering from PreciseFP and tax analysis from Holistiplan generates forms, observations, and scenarios advisors can use to help clients understand real-life consequences of their financial decisions.
PreciseFP’s Three-Step Process
Getting tax documents from clients doesn’t have to be complicated. With PreciseFP, advisors can follow a simple three-step process to obtain tax information for advising:
- Create form
- Send to client
- Retrieve document
Creating a form is simple. With PreciseFP’s library of templates, it’s easy for clients to securely upload information and documents, such as a 1040 form. Advisors can choose templates, add customizable details, include extra elements such as a text box for client questions, and match templates to their company’s branding.
Sending the form to clients is also easy. With the account information stored in PreciseFP, advisors can search for the accounts they want to target, click the Engage button, and choose which forms to send to clients. Advisors also can use customer relationship management software (CRMs) to conduct advanced searches for client segmentation.
After clients receive the form from their advisors, PreciseFP makes it easy to track their activity and retrieve the document. When a client engages with a form, advisors will receive an email from PreciseFP informing them of new client activity. On the home page, advisors can see recent engagements, including any newly uploaded forms.
Holistiplan and Tax Planning
After advisors receive completed documents from their clients, Holistiplan uses that information to help clients understand their current tax situation and plan for the future.
Once an advisor logs into Holistiplan, uploading a completed 1040 form and generating a report takes 45-60 seconds. Advisors inexperienced in offering tax planning services may wish to begin by making the Holistiplan tax report available to their clients. This tax report contains the following for the most recently uploaded 1040 form:
- Marginal tax bracket information
- Modified adjusted gross income tiers
- Schedule D
- MedicareBD premiums
- Schedule B income source (shows all accounts)
- Tax observations (which may include linked articles)
If advisors want to offer more planning services to their clients, scenario analysis can show clients tax implications that could result from various financial decisions. After an advisor chooses to create a new scenario, load a tax return, or copy from a scenario, the system can build up to 1,000 scenarios to help answer clients’ tax questions, from Roth conversions to creating a donor-advised fund.
Also included in the Holistiplan software is a feature called the Tax Explainer. This tool breaks down the client’s tax return, line by line, to explain deductions, AGI, taxable income, income tax, capital gains tax, self employment taxes, and more in an easily accessible format.
Although many financial advisors are not accustomed to offering tax planning services, adding it to your offerings doesn’t require a lot of time or resources. PreciseFP and Holistiplan’s workflow makes it easy to receive client documents and generate practical information your clients can use to understand their taxes and plan for the future.
PreciseFP and Holistiplan have made both softwares available as a free seven-day trial. To learn how you can take advantage of this offer and meet your clients’ expectations, contact PreciseFP today.
Executive Vice President, Product Strategy, PreciseFP
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