Advisor Tax Mistake #6 – Your Tax Knowledge Isn’t Getting You More Clients

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This article is the second in a series of the seven most common tax planning mistakes financial advisors make with clients

One of the best parts of working exclusively with financial advisors is that I get to meet a lot of interesting and smart people, especially when it comes to taxes. However even the most tax-smart advisors, ones who know the tax code as well as the IRS, struggle with how to communicate tax strategies to clients and leverage their tax-planning knowledge to differentiate themselves from other advisors when meeting with prospects.

While my last article focused on getting tax returns from clients, in this article I’m going to focus more specifically on getting tax information from prospects and demonstrating to them how working with you will prevent them from overpaying the IRS.

Getting the 1040

When included on a list of what to bring to your first meeting, most prospects will provide their tax documents along with investment statements, estate documents and any other documents you request. For those prospects who push back, the best advisors respond with, “I understand your hesitation. Finances, especially taxes are very personal. However, in order to do my best work, and I insist on only doing my best work, I will need to review your taxes. In retirement, taxes will likely be your single biggest expense.”