Tax Management

Tax Management

Are You Ready To Grow As a Financial Advisor?

What is Tax Management?

Most advisors are familiar with tax preparation, and some are even knowledgeable about tax planning, but one of the greatest ways to elevate the success of your client’s financial situation is to deliver proactive tax management.

With The Tax Management Journey®, we have outlined seven critical checkpoints you can use to simplify the process with your clients. Within each concept, we have developed tools and financial advisor strategies to help your clients understand how your firm’s proactive tax management will help them increase their odds of financial success.

After all—not all money is taxed the same.

  1. Understanding the Order of Money: There is an order to how clients should accumulate money and how they should take distribution upon retirement to help increase net after-tax cash flow. We leverage the tax-efficient funnels tool to help our clients visualize how to save for retirement and turn retirement assets into tax-efficient income.
  2. Measuring Your Tax Bracket: The U.S. tax system is a dynamic pay-as-you-go system, and there are many opportunities for proactive tax management within the brackets. We utilize a tax measuring cup visual aid to educate the client on ordinary income tax brackets and capital gain tax rates and illustrate annual tax management opportunities.
  3. Avoiding Marginal Tax Traps: There are tax traps that exist in the code. Within this concept, we share ways to articulate the importance of proactive tax management before your client takes major withdrawals from their retirement accounts or elects to receive Social Security income.
  4. Allocating Tax-Sensitive Assets: It’s not about what you make; it’s about what you get to keep. Taxes can create a major drag on investment returns. It has never been more important to ensure you are allocating your client accounts with the right type of investments, not just diversification but also from a taxation perspective. We have tools that illustrate to the client that there are certain investments they should hold in their retirement accounts vs. their post-tax accounts vs. their tax-advantaged accounts for increased efficiency.
  5. Gifting Strategies: Within this concept of tax management, we arm advisors with tools to help their clients maximize both charitable and intra-family gifting to minimize their income tax and their families’ future transfer tax.
  6. Pay Now vs. Pay Later: Everyone is required to pay taxes, but the U.S. tax system allows flexibility on when you pay. You can defer income through retirement accounts, deferred asset sales, or recognize income through Roth conversions or strategically-timed asset sales. This creates incredible opportunities to amplify your value with proactive tax management of these accounts and assets.
  7. Managing Your Dynamic Bracket: Tax management is a moving bullseye. Each year your clients’ personal circumstances change. Tax management is about evaluating the landscape of tax policy and your clients’ unique needs and strategically thinking several moves ahead to ensure you maximize their income and minimize their taxes.

How are Tax Management Services Different from Tax Preparation?

Preparing and delivering annual tax returns guarantees you a yearly opportunity to meet potential customers.

Not only does this spark their interest in becoming a financial advisor services client, but it also proves how valuable your wealth management services are. This allows you to charge higher planning fees and provide better customer service to your clients.

Learn tools and techniques to increase your profitable business lines by transforming tax clients into leads for your wealth management services. Even if you do not have a tax practice, our financial advisor training program can introduce opportunities to partner with an existing tax firm to borrow from their client list and increase your revenue.

At C2P, we have created training resources for advisors to confidently deliver completed tax returns to their clients, review future tax management and planning opportunities, and introduce the comprehensive financial planning services their firm can provide. Some of these resources include:

  • Read and understand tax returns
  • Deliver tax returns and review for sales opportunities
  • Identify tax opportunities
  • Utilize the what-if analysis
  • Learn to convert tax clients into financial clients
  • Identify new revenue opportunities

The problem with tax preparation and tax return deliveries is that you are essentially a historian talking to clients about past events. By the time the return is complete, there is no time to proactively make changes that could have saved the client real money.

By offering tax management services, tax savings strategies become a year-round activity. When the clock strikes midnight on December 31st of the current year, most tax savings ideas for that year are gone forever.

How are Tax Management Services Different from Tax Planning?

Imagine you are going to build a house. The first thing you would do is hire an architect to draw up a blueprint. This is very similar to tax planning. A client may come to your office and hire you for a retirement and tax plan, in which you can build that client their customized bucket plan, share with them how to position their assets, and discuss how they should withdraw their money in the most tax-efficient way.

While this plan might initially be valuable to that client, many consumers need help carrying out the plan they’re given. With constantly changing tax laws and individual circumstances, as soon as the plan is completed, it is already on the way to becoming obsolete.

Tax management is a specific service we provide to our wealth management clients. Just as many of these clients are unable to execute their investment plans on their own, they also struggle to implement their tax plan independently, requiring an advisor to help them with proactive tax management.

This is like hiring a builder and maintenance team to execute the blueprint. In this analogy, tax planning is the architect, and tax management is the construction crew. Without the builder and maintenance team, the blueprint is not very useful.

By implementing financial advisor strategies to anticipate tax changes, you will differentiate yourself from other advisors and tax professionals, allowing you to charge higher planning fees and provide greater service to your clients.

As a holistic financial planner, you can work with the tax professional to add value for your customers by looking further into the future. Additionally, part of your fiduciary responsibility is to integrate tax management into financial planning and investment management. If you are a CERTIFIED FINANCIAL PLANNER™, this is essential. Review the wealth management services your firm can provide, outline any tax strategies, and develop relationships with your clients.

“A competent financial planner can evaluate multiple years of prior 1040s and supporting documents to inform present tax-planning decisions and identify planning opportunities and areas of concern for the current and future periods.”

– Certified Financial Planner Board of Standards

Do you want to be more confident while engaging in tax management with your prospects and clients? When you integrate profitable business lines like taxes, financials, investments, and insurance into one holistic plan, you provide them with more valuable financial advisor services.

Scale Your Business with Process-Driven Tax Management

You know how important it is to diversify your client portfolios across equities, bonds, annuities, alternative investments, etc., but you should also differentiate your tax plans to mitigate future IRS pitfalls. Luckily, you do not need a tax background to begin; you will become more competent and confident.

Taxes are not a one-time thing; you will deliver ongoing advice and provide solutions to tax concerns.

“In my personal opinion—and I know I share this with some of my colleagues—it’s very hard to be a holistic advisor if you’re not talking about taxes.”

-Dave Alison, CFP®, EA, BPC

How Does Tax Management Benefit Your clients?

Managing your clients’ taxes can add immeasurable value and worth to your job as a financial planner. The benefits of tax management to your clients include:

  • Only paying their fair share
  • Choosing when to pay taxes
  • Reducing further taxation on retirement income
  • Plan flexibility
  • Lower RMDs & Medicare premiums
  • Avoiding a tax hit for the surviving spouse
  • Legacy planning
  • Reducing policy risk
  • Coordinating their financial and tax plan cohesively
  • Making better investment decisions
  • Higher likelihood of achieving goals
  • Eliminating avoidable taxes and penalties

How Does Tax Management Help Build Profitable Business Lines?

Tax management is one of the most significant profitable business lines you can have at your firm. Clients often view taxes as their most daunting and confusing expense, especially regarding retirement. Our financial advisor training programs can help you make sense of the chaos.

You do not need a tax background to be successful. You can hire a CPA, enrolled agent, accountant, or another tax expert for your in-house team. If you are interested in starting a tax preparation business, we have a proven model to help guide you every step of the way!

The most successful advisors are always thinking about growth—they want to increase their offerings and expand the profitable business lines they offer. You can accomplish both simultaneously by building a tax practice within your financial advisor services business.

Tax preparation allows you to get in front of them once a year. This will enable you to review their taxes with them and provide an overview of how to include their tax strategy as part of a holistic financial plan.

Even if they are not ready for your other financial planner services right now, you will be there when they are.

If you are not interested in starting your own tax preparation firm, no worries! You can still bring incredible value to your clients by offering integrated tax management alongside your financial planning process and investment management.

Lastly, we can share how to take this approach and partner with other CPA or tax professionals to bring this valuable service to their clients.

How Does Tax Management Help You Grow Your Practice?

Tax management sets you apart from the competition allowing you to attract more clients, differentiate yourself, charge higher planning fees, and provide a new marketing platform to utilize in your town. It helps you go above and beyond for your clients by providing additional retirement and legacy planning.

Integrating taxes into your financial advisor services is one of the fastest ways to get in front of new prospects and grow your business.

Our financial advisor training program on building a tax business, delivering tax planning integrated within your financial planning process, and offering tax management as part of your wealth management offering will help you:

  • Become a truly holistic advisor
  • Grow your business through tax management marketing
  • Leverage tax data to create new opportunities for your clients and your business
  • Provide better advice to your clients

Are You Ready To Grow As a Financial Advisor?

How Financial Advisors Can Build Tax Management into their Business

At C2P, we have perfected a three-prong approach to integrated tax management into your business to get in front of new prospective clients:

  1. Start a Tax Practice – The Tax Practice Builder
  2. Rent a Tax Practice – The Tax Client Conversion
  3. Buy a Tax Practice – The Tax Practice Buyer

Whether you build a tax practice from the ground up, partner with an existing tax professional, or acquire tax businesses, the opportunity to bring a proven tax management process to those clients will differentiate you from any other advisor and bring value to their financial situation.

You can partner with an existing tax firm to test it out and see if adding taxes to your profitable business lines would work for your practice. This allows you to borrow from their client list until you get more tax experience within your company and help you convert more prospects into wealth management clients.

The Tax Management Journey®

Attend The Tax Management Journey® financial advisor training program if you are interested in adding tax management to your service offering.

The Tax Management Journey is a financial advisor training program designed to provide you with the competency and confidence to expand your business, set yourself apart from the competition, and deliver powerful tax strategies to your clients and prospects.

The Tax Management Journey is a financial advisor training program that delivers a 7-step process to identify and educate on important topics.

  1. Understanding the Order of Money
  2. Measuring Your Tax Bracket
  3. Avoiding Marginal Tax Traps
  4. Allocating Tax-Sensitive Assets
  5. Gifting Strategies
  6. Pay Now vs. Pay Later
  7. Managing Your Dynamic Bracket

Be more confident while engaging in tax management, and provide more valuable advice by integrating their tax, financial, investment, and insurance into one overall plan. Learn how to deliver proactive tax management to attract more prospects and apply real-life comprehensive tax management solutions to existing clients.

Build Your Tax Management Practice with C2P

There are many ways to gain new clients and grow your business—online seminars, live events, social media, search engine optimization, television appearances, etc. And while this type of marketing certainly deserves your attention, it is a slow process. What if you could acquire new customers almost instantly? One sure way to do this is to add profitable business lines like taxes into your existing wealth management services.

Starting a tax practice is proven to grow your existing financial advisor services business. Adding a tax practice to your existing wealth management services will generate additional revenue and add new leads to your sales funnel. Clients are uncertain about the future of the economic landscape and the best way to take advantage of it, so that opens the door for you to take advantage of the opportunity taxes provide to your growing business.

You should consider incorporating a tax practice if you:

  • Are an entrepreneur looking to grow your business
  • Want to provide better advice to your clients
  • Aspire to become a truly holistic financial planner
  • Need to find new prospects and potential customers
  • Want to add additional rainmakers to your business

C2P Can Help You Build Your Business Your Way

Adding tax management to your portfolio of financial advisor services can be daunting for even the most seasoned professional. But it can differentiate you as a unique, multi-solution financial advisor and showcase your firm’s capabilities to a new group of potential clients.


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