Incorporating tax planning as a value-added service can set you apart as a financial advisor, helping you attract new clients and strengthen existing relationships. Taxes are one of the most significant factors impacting long-term investment outcomes, yet many clients don’t realize the value of proactive tax strategies. By offering tailored, tax-efficient solutions, you position yourself as a trusted partner who helps clients keep more of what they earn while achieving their financial goals.
Tax planning for financial advisors is a value-added service that helps clients keep more of their hard-earned money. It's not just about filing taxes once a year; it's an ongoing strategy to minimize tax liabilities and maximize wealth over time.
When you engage in tax planning, you're looking at the big picture of your client's financial status—their income, investments, retirement plans, and major life events—and finding smart ways to reduce their tax burden. These strategies might involve timing the sales of securities, giving for maximum deductions, choosing tax-efficient investments, or structuring retirement withdrawals to minimize taxes.
Clients recognize the significant impact that taxes can have on their overall financial health and long-term wealth accumulation, making tax planning an increasingly sought-after service. Despite the high demand, there's a notable gap between client expectations and the services provided by many financial advisors:
89% of clients want tax-planning advice from their financial advisor, yet only 25% receive it.1
This discrepancy presents a substantial opportunity for financial advisors to expand their service offerings and meet a critical client need. By incorporating tax planning into their suite of services, advisors can address this unmet demand and enhance their value proposition in several ways:
What are the top triggers that signal a need for tax planning services? Here are seven opportunities where offering tax planning could help you win more business.
Are you working with a new client who needs to transition to your model portfolio? Without the right strategy, transitioning an account can rack up a lot of taxes. Give your clients the insights they need to decide whether an aggressive move or a more gradual approach is right for them so they feel confident about making the switch.
Does your client want to offset their capital gains while staying invested in the market? Show clients how proactive tax-loss harvesting can sell losing positions to reduce their overall tax liability while repositioning their portfolio.
Is your client looking to give back to their community or build a legacy while reducing their tax burden? Help clients align their philanthropic goals and personal values with tax advantages by donating appreciated assets or setting up donor-advised funds.
Are your clients concerned about transitioning to retirement and reducing their risk or ready to take a chance to grow at a faster rate? Guide clients through tax-efficient portfolio adjustments as their risk tolerance or financial goals evolve.
Is your client hesitant to move assets due to concerns about embedded gains and potential tax implications? Offer solutions for slowly transitioning portfolios from other platforms while focusing on minimizing tax consequences that could occur from selling securities too early (short-term gains) or at a large gain that leads to a sudden tax hike. A data-driven approach that looks at timing and tax-loss harvesting can simplify transitions while preserving portfolio integrity and minimizing taxes.
Does your client need liquidity but worry about how selling investments could impact their tax liability? Advise clients on strategically raising liquidity by evaluating short-term vs. long-term gains. A tailored, tax-aware approach to cash can save your clients a lot in the end.
Have your clients experienced a major life change and need guidance on navigating the tax impacts of their new financial situation? Key events, such as a job promotion, divorce, or relocating to a high-tax state, present significant opportunities for tax planning. Position yourself as a resource for navigating these transitions and helping clients adapt to new circumstances.
As a financial advisor, you can guide them on options like donor-advised funds, qualified charitable distributions from IRAs, or bunching donations to surpass the standard deduction threshold. By optimizing their philanthropic contributions, you're not only helping them support causes they care about while maximizing tax benefits.
Your expertise in estate and legacy planning can be invaluable to clients looking to protect and transfer their wealth efficiently. You can assist in structuring their estate to minimize estate taxes, utilize lifetime gifting strategies to reduce taxable income, and set up trusts that align with their legacy goals.
As you guide clients toward a comfortable retirement, incorporating tax-efficient strategies is crucial. You can help them balance their retirement income sources and establish a withdrawal strategy that minimizes taxes on required minimum distributions (RMDs).
Looking for a comprehensive, always-on solution to help you provide informed tax planning support? Tax Management Services by AssetMark provides several features that let you offer tax management services to your clients.
Ready to elevate your practice with proactive tax strategies? AssetMark’s TMS equips you with the tools and insights to deliver personalized, tax-smart solutions for your clients.
Contact us today to learn how TMS can enhance your offerings and help you win more business. Schedule a consultation to explore how we can help you integrate value-added tax planning into your practice. Let’s work together to grow your business and deliver exceptional client outcomes.
7592070.1 | 02/2025 | EXP 02/04/2027
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AssetMark is a leading provider of extensive wealth management and technology solutions that help financial advisors meet the ever-changing needs of their clients and businesses. The information on this website is for informational purposes only and is intended as an overview of the services offered to financial advisors, not a solicitation for investment. Information has been drawn from sources believed to be reliable, but its accuracy is not guaranteed and is subject to change.
Advisors seeking more information about AssetMark’s services should contact us; individual investors should consult with their financial advisor.
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