Grow New Business and Solidify Existing Client Relationships with Proactive Tax Planning

 “What can we do today to reduce your taxes tomorrow?”

How many financial advisors ask this question when meeting with their clients?

If you are an advisor who offers comprehensive financial planning advice, then you should.

A “proactive tax planner” is someone who seeks tax reduction possibilities for your clients. This service is an essential component of complete financial planning. Does this mean you are acting as their tax preparer? No – You are not preparing taxes or performing an audit. What you are doing is taking an active interest in finding opportunities from an investment perspective for your clients to reduce their taxes.

You cannot fully offer the most customized and complete advice to your clients until you know the tax implications of your recommendations. This doesn’t mean simply knowing if a recommendation is tax-free or tax-deferred. If you do not gather essential data by reviewing your client’s tax return, it will be difficult for you to make the most fully-informed recommendations for them.

How do you do this?  There are three main steps for “proactive tax planning”.  They are: 1) Gathering information through a review of their clients’ tax returns; 2) Providing and offering tax reduction strategies/solutions specific to each client’s situation; and 3) Staying current and informed on any new tax strategies or law changes that may affect their clients’ situations.

There is a very valuable ripple effect that happens when you add proactive tax planning to your menu of services:

Ripple 1: You become a more valuable resource to your cli­ents.

Ripple 2:  You demonstrate your ability and commitment to providing high-level services and experience, rather than generic advice.

Ripple 3: You able to offer a service that other financial advisors can and do not offer.

Ripple 4: It helps validate the fees that clients pay for your services.

Ripple 5: Clients are more likely to refer you to others.

Providing proactive tax planning adds massive value and enhances the services you provide to your clients and prospects. Research has confirmed that advisors who offer proactive tax planning have clients who are more satisfied with the services they receive.  In addition, it leads to clients being more likely to refer you to others. Your role as a financial advisor is to create a client experience that embraces all aspects of financial planning to best help your clients. By becoming a “proactive tax planner,” you take an enormous step toward being an elite advisor!


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