How Advisors Should Talk Tax-Efficient Planning With Clients
Katie Godbout, Director of Sales & Marketing
November 15, 2016
The elephant and the snowball
Taxes are a critical piece in retirement planning, yet most financial advisors avoid discussing the topic for several reasons. First and foremost, they fear violating federal regulations or industry standards that limit who can provide "tax advice."
The result? Advisors and firms are reluctant to talk taxes or incorporate tax-related tools, even if these tools help deliver better financial advice through the consideration of the likely tax consequences of various strategies. The topic of taxes and tax-efficient planning is like the elephant in the room – many financial advisors know taxes have a significant impact on their clients, but due to uncertainty surrounding the scope of their duty to clients and the possibility of compliance issues for addressing taxes, they ignore or gloss over the topic of taxes.
Lumping anything tax-related into "tax advice," however, is a disservice to the client.
Under the current suitability standard and definitions of "tax advice," financial advisors may already have a duty to understand, consider and explain the tax consequences of various strategies. And if they don't yet, they most likely will under the Department of Labor's new fiduciary rule, which broadens the definition of a fiduciary starting with initial compliance by April 10, 2017.
So, let's turn our gaze to the elephant in the room. Complete this form to download the white paper for free.
Katie thrives on making an impact and achieving big goals. She believes that communication strategy has a major impact on business success. As a strategic communicator with a diverse background in non-profit, B2B, healthcare, and SaaS, Katie combines her expertise in strategy development, marketing and sales to spread the word about how Covisum can help advisors and institutions inform their clients of the best financial decisions.