When financial advisors, CPAs, and
attorneys maintain a healthy and communicative relationship, they become a
powerhouse team for clients (especially during tax season).
So even though it can come with
challenges, this
team’s collaboration and combined knowledge make a holistic team that can
better manage a client’s financial, tax, and legal goals.
Here are some benefits of incorporating
clients’ CPAs into your practice:
Help clients avoid surprises during tax
season
Investment decisions and tax efficiency
go together when managing and advising clients on their financial decisions.
Portfolio performance can be greatly affected both positively and negatively by
tax implications.
“That’s why periodic check-ins with our
clients’ outside accountants can help us make sure our work adheres to any of
the long-term tax planning they are doing” (Kiplinger).
While it is beneficial to maintain
communication throughout the year, it’s especially important at year-end and as
tax season approaches. Advisors who collaborate with other financial
professionals during these crucial times can work with their client’s CPA to
leverage a variety of tax strategies such as tax-loss harvesting or Roth
conversions of their traditional retirement account.
Get a multi-dimensional look at client
portfolios
As you continue to help clients navigate
various life events, goals, and milestones, keep in mind that their financial
situation will evolve. Factors such as cash flow, investment strategies,
retirement planning, and tax preparation impact one another.
And while it certainly takes a village to
maintain your client’s financial plan, the partnership between a financial
advisor and tax professional is critical.
“By incorporating tax planning into your
investment strategy, you can make better-informed decisions to maximize your
dividends while maintaining tax efficiency,” (CRR CPA).
Align strategies of all parties
When thinking about effectively
communicating with a client’s CPA, consider the goals and objectives you share.
As the financial advisor, you typically focus on the present and future state
of your client’s financial profile, while the CPA looks at the past and present
to evaluate their tax dependencies.
Due to the potential misalignment of
intent, effective collaboration is essential:
“[It] removes the need for a client to
cross-examine each party’s recommendations, and thus cuts down on the overall
time spent pivoting between advisers,” (PICPA).
Working directly with your client’s tax
professionals can streamline communication and reduce the frustration around
the client trying to effectively relay to you why their CPA recommended one
strategy over another.
Make meaningful connections for the
future
Connections are essential to professional
relationships, both now and in the future.
“CPAs are routinely bombarded by
financial professionals who want to refer business to them. An astute advisor
reverses the overture, so the CPAs could see offering value to them,” (U.S.
News).
With all the in-depth knowledge advisors
have about a client’s unique situation, they can refer them to tax
professionals that match their needs, showing professionalism and industry
expertise to all involved. These connections could lead to referrals from both
the CPA end as well as the client.
Overall, it benefits everyone in a
client’s financial strategy to work together for a variety of reasons.
“The successful collaboration between a
financial advisor and CPA shows that nurturing COI relationships does more than
produce mutually beneficial results. It also demonstrates to clients your
professionalism, value, and trustworthiness,” (U.S.
News).
In addition to nurturing your
professional relationships, working with your client’s CPA allows clients to
know what to expect, align their financial decisions, and streamline money
management as tax season approaches.
