Generate ‘Relationship Alpha’ By Teaming with Your Clients’ Tax Professionals

Six strategies for advisors to add value during and well beyond tax-filing season.

By Leslie Geller

Financial professionals who want to grow their practices or deepen engagement with existing clients are increasingly looking for ways to differentiate service offerings beyond investment management. Tax season is a great opportunity to do just that.

In a recent study from my firm, Capital Group, we identified that the ability for an advisor to generate relationship alpha — or value-added services and wealth strategy guidance, such as tax and estate planning, family governance, charitable planning, etc. — is a key component of the highest-growing advisory practices.

This work can foster stronger client bonds and lead to better client outcomes while also building relationships with CPAs, tax attorneys, estate planning attorneys and other experts — important sources of potential referrals. In the case of taxes, the perceived complexity of tax law may keep some financial professionals from offering these services.

It turns out there are many ways you can add value to your client’s experience during tax season and beyond without being an expert in tax policy or regulation.

Lead the Process

The first step may be starting a conversation with clients and identifying the need for a holistic tax plan, then encouraging them to take the next steps. Clients may need help coordinating the efforts of the various tax professionals they have or need to engage, including tax attorneys, CPAs, valuation firms and so on.

As a financial professional, you have the expertise and client relationship that is ideal for the role of “connector,” making sure everyone is working from the same unified plan and towards a common goal.

Provide a Big-Picture View

You can use your holistic view of your client’s life and goals to inform the tax professionals with whom they work of the key players and facts for them to consider when preparing their taxes.

The more details tax professionals have about a client’s life and business activities, including a thorough understanding of personal, business and family context, the better the service. Clients don’t always understand which facts are relevant in tax planning and filing discussions, and tax professionals such as CPAs and tax attorneys may not always ask the right questions. You can fill potential gaps in information, and relay updates on current situations in the client’s life that may require changes to the tax return or proactive tax planning.

“You can fill potential gaps in information, and relay updates on current situations in the client’s life that may require changes to the tax return or proactive tax planning.”

You can also keep tax professionals up-to-date on changing circumstances — and this also applies long beyond tax filing season. CPAs, for example, don’t typically engage in this type of regular monitoring, but you can help them stay on top of it.

Of course, it’s important to get your client’s permission before sharing any of their personal details or financial plans and investments with others — in line with your firm’s privacy policies.

Help Clients Find the Right Help

Clients often look to financial professionals for recommendations on other specialists, such as CPAs and tax attorneys, to work with. You may already have a list of names you have heard of or collaborated with in the past. Some advisors go even further, getting to know tax experts within their region with the goal of being able to recommend a good fit.

If you are making recommendations to a client, it helps to have a sense of the tax specialist’s experience, areas of specialty, pricing and transparency. This leads to fewer surprises when the client is introduced.

These specialists appreciate advisors reaching out to gauge interest in a potential referral and give them background. They avoid wasted time with preliminary phone calls and interviews, and you can start to build a strong reputation among clients’ centers of influence.

Provide Perspective and Enlightenment

Tax and estate planning topics are complicated and dense, and tax professionals often take for granted the knowledge and training required to fully understand, for example, the deduction limitations for charitable contributions or a particular gifting technique.

You can help the client understand the steps involved, the underlying reasons for a particular planning or transaction recommendation, or anything else that needs clarifying. Sometimes it helps to have someone who is not a CPA or tax attorney explain or provide a different way of looking at a tax return and holistic tax and estate plan. To keep things very simple, some advisors use infographics or flowcharts to illustrate a complicated plan for clients.

Additionally, you can provide similar context and color for the tax professionals, clarifying a client’s wishes or family dynamics, or simply providing a third-person perspective in the engagement.

Keep Things Moving

Tax professionals usually do a great job preparing tax documents and getting them to clients for review, but then can lose momentum. Unfortunately, this tends to be where clients lose momentum, too. The very size of the package of documents (and the complexity!) can be intimidating, and clients may reason that they’ve already done most of the work even when there is more to do. The problem is if a draft becomes outdated or needs to be redone for any reason, it can be more expensive to complete.

Financial professionals can be instrumental in helping the clients complete the process by helping them review the draft documents, overseeing changes and revisions, and generally seeing the process to completion. Even something as simple as making the appointment to sign the documents with the attorney and printing and delivering documents to the client can be incredibly helpful in getting the client through the process.

Tie Up Loose Ends

You’d be surprised how often all of this major legwork is done, only for a client to forget to sign a tax return or other important tax-related document. I saw this more than once during my 13 years practicing tax law. Make sure to help your clients follow up on any loose ends. A little goes a long way.

Leslie Geller is a wealth strategist at Capital Group, home of American Funds, which manages more than $2.3 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world. She is a former tax and estate-planning attorney.


Latest news

Bluespring Wealth Partners Acquires Scottsdale, Ariz., firm

Led by husband and wife Kevin and Carrie Dick, KDI Wealth Management oversees $750M in client assets and is rated in the top 10 in state by Forbes.

Judge Halts Rule Capping Credit-Card Late Fees

A federal judge in Texas halted the Consumer Financial Protection Bureau's new rule capping credit card late fees at $8.

Inflation, Economic Uncertainty Upending Retirement Dreams for Many

Nationwide’s Advisor Authority survey finds many are taking non-traditional approaches to retirement, including moving in with their adult children.

Perigon Wealth Management Appoints Head of Advisor Success and Integration

Maria Daley has more than 30 years of experience leading business development and relationship management teams.

SEC Wants RIAs to Verify Customer Identities

The SEC and Treasury say the rule is needed because customers have used RIAs for illicit foreign financial activity in the United States.

Concerns About Insufficient Savings Keep Many Retirees Awake, Survey Finds

Among those in retirement, 32% fear they have too little savings, according to the Schroders 2024 US Retirement Survey.