As surge and tax season wrap up, Matthew and Micah share insight on why they time surge the way they do and the importance of tax season for providing massive value to clients. Tax documents provide a lot of important and helpful information—but why is it so hard to ask for them? And why are clients uncertain about providing them? If you and your team have had trouble with getting tax returns from clients or you are wondering about the best way to navigate that process, this is the episode for you.
Listen in as the guys share the reasons why you may be having trouble getting the documents you need and provide clarity on how to set up a process that makes this easier and more understandable to everyone involved. You’ll learn some great tools and ideas that will allow you, your team, and your clients have a smooth tax season every year.
You know that tax planning is a way to offer more value to your clients—but how do you get started?
If you’ve been listening to The Perfect RIA podcast for a while, you know that one of the best ways for a financial advisor to add value is to offer tax planning to their clients. But how do you take that first step, and how do you build a system that works? In this article, podcast hosts Matthew Jarvis and Micah Shilanski share key tips for getting started with tax planning, including how to approach your client and how to get your team on board.
Offering tax planning along with your regular financial services lets your office deliver more value to your clients than ever before—and when your clients are happy, they stick around and even send you more referrals. Everybody wins!
However, for many new advisors, the idea of offering tax planning for your clients, on top of all the other things you’re doing, feels as likely as composing an aria for each one. You’re a financial advisor, not a CPA. Don’t they already have one of those?
The good news is that even advisors who don’t have deep knowledge of taxes have an opportunity to deliver a ton of value. You don’t have to know everything there is to know about the tax code—that’s why they have a CPA. You just have to know enough about what matters most to your clients.
But first, you have to help two important groups of people understand why it’s beneficial to keep an eye on your tax planning: your rockstar team and your clients.
The first step to any good process is getting your team on board, and offering a completely new service is no exception. If your relationship manager doesn’t understand why you need your clients’ tax return, they won’t be able to articulate the value to your client.
From a team perspective, building a process is hard work. First, they have to learn what information to pull from each tax return, and until you build an automated system, all that data entry happens manually. This is a pretty big ask for a team that’s already doing a lot; as the lead advisor, it’s up to you to get them on board. And if the rest of your team believes implementing your idea would take too much work, you’re not doing a good enough job articulating that value.
Matthew Jarvis suggests connecting the idea to a recent pain point your team experienced. Before springing the new process on your team, remind them of the time a client called and wanted $50,000 from their IRA and nobody knew how much should be withheld for taxes. This is a pain point the team experiences all the time, and they’ll be happy to hear you have an idea for solving it.
From this perspective, your team will easily see how, with the client’s tax return on file, they can add the necessary information to the CRM so they can always refer to it. And by building a review checklist for reviewing all of your clients’ tax returns internally, they’ll know exactly how to approach each one.
When you go to a bank to take out a loan, you quickly learn that the whole process involves more files and forms than you think could possibly be relevant. You want the money, but if there were a way for you to skip the endless paperwork, you would take it in a heartbeat.
The same is true when a client doesn’t understand what you want them to do or how it’s in their best interest. You know the value of having your client’s tax return on file is worth far more than whatever hassle they have to go through to provide it, but if your clients don’t clearly understand that value, they’ll never follow through on your request.
Your internal review checklist isn’t just a valuable tool to keep your team on the same page; it’s also an easy way to explain your value to clients. Micah suggests using that same checklist to help prospects understand just why their tax return is so important to your work. Here’s how he explains it:
“Our benefit of reviewing this is twofold: One, we get to see you a little bit more frequently and know a little bit more about what’s going on financially. Two, we want to look at 37 different things on your tax return, because we want to make sure from our perspective that things are set up correctly.” What client doesn’t want a second pair of eyes on some of the most important paperwork they’ll ever file?
In a regulated industry, there’s a bright line between the kind of tax planning you can do for your client and actual tax advice, which is the purview of their CPA. Your team can and should be a second set of eyes (Matthew’s team once caught a $400,000 mistake on a CPA-prepared tax return!), but for legal and ethical reasons, you can’t promise that you’ll catch all mistakes.
Yes, it’s the CPA’s responsibility to look in the rearview mirror to accurately report where the client has been throughout the year—but the financial advisor should be looking out the front window to see where the client is going and help them reduce their tax liability. Along the way, you can offer important how-to guides for paying estimated taxes, tips for resolving lost IRS payments, and other value-adds clients appreciate.
And if you know a prospect is actively shopping around for an advisor? That’s good news: you have a golden opportunity to demonstrate how you are miles above the competition. Ask, “How will the other firms you’re interviewing make sure you’re not paying too much in taxes? How will they tell you what to withhold when you claim Social Security? Are they asking for your tax return?” If you’re the only financial advisor they interview who offers tax planning—and your client understands why that matters—your firm will win out every time.
If you approach clients with uncertainty, then they will have an equal amount of uncertainty. - Matthew Jarvis Click To Tweet
If they do not see how the document is directly related to them achieving their goals, they’re not inclined to get you that information. – Micah Shilanski Click To Tweet
If your clients are not providing their tax documents, it’s because you as the advisor have not articulated the importance in a way that makes sense to them. – Matthew Jarvis Click To Tweet
This is The Perfect RIA, in case you didn’t know. Bringing you all the strategies to help your business grow. Are you happy? Are you satisfied? Are you hanging on the edge of your seat? Sit back and listen in while you feel the beat. Another myth bites the dust…This is The Perfect RIA, in case you didn’t know. Bringing you all the strategies to help your business grow. Are you happy? Are you satisfied? Are you hanging on the edge of your seat? Sit back and listen in while you feel the beat. Another myth bites the dust…
Matthew Jarvis: Hello, everyone, and welcome to another episode of The Perfect RIA podcast. I am your co-host, Matthew Jarvis, and with me, the man, the myth, the legend, Micah Shilanski. Micah, how are you my friend?
Micah Shilanski: Jarvis, I am doing excellent. Super excited. We are wrapping up Surge. Of course, by the time this airs, Surge will be done. But man, it’s just been an amazing time to go through. I really enjoyed… Of course our surge is always planned right before tax season, right before taxes are due so we can get clients in, so we can review their taxes and go through, which is kind of timely ’cause that’s what we’re chatting about today.
Matthew Jarvis: Yeah, it really is, Micah. And you and I talk about tax planning all of the time.
Micah Shilanski: All the time.
Matthew Jarvis: We talk about it from delivering massive eye to clients, we talk about it for getting referrals from centers of influence. We talk about it in the prospect process, in the lead process, how that it’s a critical component of really all aspects of financial planning. And I haven’t really ever, Micah, had somebody push back on that specifically. What I’ve gotten push back on, and what we wanna talk about today is, how do you actually get tax documents from clients and prospects? A lot of advisors have the experience of, I ask my clients, I ask my prospects for their tax documents, and then for any number of reasons, I never actually see the documents.
Micah Shilanski: Now, I wanna do a shout out to our members too, and thank you for asking this question, because sometimes we get this point, or at least I do, and I don’t mean this in an egotistical way, but I’m so used to getting tax returns I forget that this is even the first step in the question about saying, “No, we need to get the tax return first so we can add value.” ‘Cause it’s just such an auto-pilot with our team, our entire team. And this is the point I think you wanna get to. Your team is getting the tax returns, you’re never even having to ask for them. This is part of the process from the word go.
Matthew Jarvis: Yep. And part of that, Micah, we talk about… You and I have been doing this for a lot of years. But when it comes to prospects or clients or anybody, when you and I talk to a client, it’s not like, “Hey, would you please provide us with your tax return?” It’s, “Hey, where’s your tax return?” It’s like when you fly, I just flew back from Texas this weekend. They didn’t say, “Hey Mr. Jarvis, would you please mind putting your seatbelt on?” It’s like, “Oh put your seatbelt on.” Like it’s not a question, it’s not a negotiation thing. And for us it becomes the same thing. But early in your career, or if you’ve not ever asked for tax documents before. Let’s say you’re 20 years into your career and this is a new thing. And you approach clients and prospects with uncertainty like, “Hey, would you mind giving us your tax documents?” Then they’re gonna have an equal amount of uncertainty.
Micah Shilanski: Now, one of the things that I’ll push back on as well, as our members know, I’m building a house right now, so I’m dealing with all the joys of contractors and then construction loans, etcetera. And whenever the bank comes to me and asks for a document, my general answer is no. Now, I know that they have the money, yadda, yadda, yadda, it’s the same thing I tell clients. But my general answer is no, because I do not see a clear benefit for me providing this document with building my house and getting a loan. I’m like, “You don’t need this, you don’t need a P&L every month. Shut up and just give me the money and move on.” Now as irrational as that may seem, when you’re listening to that, I’m gonna argue this is the same thing our clients are feeling as well when you ask them for a document, any document, we’re not just talking taxes. Anything. It could be a statement, it could be a paystub, it could be a tax return, anything, if it’s not directly… If they do not see how it’s directly related to them achieving their goals, they are not inclined to get you that information.
Matthew Jarvis: Micah, that’s a great comparison because you think of a lot of our respective clients, we don’t even have to ask them for their tax return, the second they get it done, they bring it in. Now that’s not every client, but for those clients, for the clients who bring it in automatically, and for the ones that don’t, Micah, it goes to your point, they either see it a value or they don’t. So the ones that aren’t providing you their tax return, the value’s not clear to them. Why they’re looking… Why would I go through the hassle of getting this guy a copy? Why would I potentially expose my information to new people? Why would I even want to think about taxes between now and next year? And this is where our Jocko Extreme Ownership, if your clients and prospects aren’t providing you your tax return, it’s because you Mr and Mrs. Advisor have not clearly articulated the value in a way that makes sense to them.
Micah Shilanski: Okay, so step one of doing this process and getting clients tax return is to create a process. Right? What is your process for getting the tax return and getting your team on board? I wouldn’t go directly to the clients and start asking them this without bringing your team up to speed because then the client’s gonna call and says, “Well, I need to get give my tax turn.” Then the RM’s gonna be like, “Well, oh, okay, why does he need your tax return?” And then the client’s like, “Well, I don’t know why they need my tax return.” So the first step in all of these processes is you gotta work with your team, you’ve gotta iron in and out how are you gonna get the returns, how are you gonna communicate it to the client. Why does your team… Your team needs to know why it’s beneficial for you to have it as well. So this is gonna start with internally first getting this process in place before we move it to clients. Jarvis, is that fair?
Matthew Jarvis: Micah, that’s a really good point to bring up. Not only do you have to have team buy-in for all those reasons that you mentioned, but it lets you also practice explaining this value. This is a very friendly audience who for better or worse have to listen to your crazy ideas.
Micah Shilanski: Your jokes.
Matthew Jarvis: For your jokes or whatever. This is your time. If the team is saying, “Hey, I don’t know, this sounds like a lot of work.” Okay, we’ve got a buy-in issue, we need to start there.
Micah Shilanski: Now with our team as well, when we get the tax returns, we actually take it to the next step, which is we get the key information from the tax return and we enter it into our CRM. So we have this data. Now, if you think about this from a staff perspective, this is a lot of work. They gotta get the return, they gotta know how to look at the return, so we have to educate them on that, then they have to get the data, and they have to manually put it into the CRM until we can get a simple automated way to do this. So again, this is a pretty big ask that you’re asking for your team that’s already doing a lot. So really coming with the why. So Jarvis, what is the why? Let’s hit this real fast. Is, what’s the why? Why do you need the client’s tax return? Why is it beneficial to get it? Why should you have these numbers?
Matthew Jarvis: Yeah, a why that I like to give the team is, I say, Team, do you remember when so-and-so client called last week and they wanted $50,000 from their IRA and you nor they knew how much should be withheld for taxes? Oh yeah, I totally remember this, right now, it’s a pain point that’s applicable to them. Cool. By having their tax return, we can then put in the CRM how much needs to be withheld from distributions. So right there, I’m connecting it to a pain point that they experience all the time, client says they want $10,000, the team doesn’t know how much to hold back in taxes. Cool, and now we know that. So that’s directly connected to them. And then I take a little bit of a step back further and I say, “Listen, by having their tax return it let’s us deliver more value to them, which let’s just keep them as a client, which gets us more referrals and so forth.”
Micah Shilanski: I love it. Jarvis, I think that’s brilliant. It connects it directly to them. The other one that I like to throw in there with our ops team as well, I love the distributions, but how many times do we have to go back to clients and they have to do an amended return because they missed an RMD. Or they didn’t miss the RMD, they missed putting it on their tax return, or they didn’t put all the interest and in dividends, etcetera. These are things that we get to review, and how much value is that to a client if we get to catch these things before the IRS does? And the team’s like, “You know what? That’s a huge benefit that we can add.”
Matthew Jarvis: Micah, another example I give to the team members, but also to clients themselves, which we’ll talk about in just a second, is being able to kind of reconcile or compare the tax return to the information we know. Now, I used to tell clients more often, “Hey, we’re here to catch mistakes,” but I wanted to be careful to not imply that I could catch all mistakes, right? If their W-2 from wherever didn’t report, I can’t catch that. So say that we could compare your information to the information that we have to make sure that it’s accurate. And team and then advisors and clients, we’ve caught on mistakes ranging from tens of thousands of dollars to, Micah, earlier this year, we caught a mistake that was a $800,000 mistake on the client’s tax return. Their 401k rollover had been coded incorrectly on the tax return. $800,000 mistake. So these aren’t little things. Go ahead, Micah.
Micah Shilanski: And this was a return that a CPA did, correct?
Matthew Jarvis: This one was actually… I’ve had it done… I had a $400,000 one a few years ago that the CPA had done…
Micah Shilanski: Okay.
Matthew Jarvis: Because the 1099 was incorrect from the plan custodian, they just added the data in and nobody thought to ask why the client took this distribution. By the way, Micah, on that one, the client had done that, they had paid the taxes on this…
Micah Shilanski: Oh, so brutal.
Matthew Jarvis: The $150,000 in taxes.
Micah Shilanski: Right, right.
Matthew Jarvis: No one had said anything. We go to cover the taxes, I’m reviewing it, and I am about to fall out of my chair.
Micah Shilanski: Right.
Matthew Jarvis: And we got it fixed, and we amended the return, they got their money back.
Micah Shilanski: But the first reason you fell out of your chair is ’cause you’re like, “Oh crap, we screwed up a rollover,” right?
Matthew Jarvis: “How did we do this?”
Micah Shilanski: That’s the first thing that goes through your head.
Matthew Jarvis: Yeah, the $800,000 one, he was doing his own return.
Micah Shilanski: Gotcha.
Matthew Jarvis: But still the mistake was there. So we can stress, “Hey, we’re an extra set of eyes this thing.”
Micah Shilanski: So this is a dishwasher rule…
Matthew Jarvis: Yes.
Micah Shilanski: Right here, which I wanna get to, right? So this is why I like having a checklist. You should have a checklist that goes through, and this is great, “We’re gonna review 37 things on your tax return.” Now, the way I like to present this to clients is to go through and say, “You know what, Bob and Sue, John does a great job doing your taxes every year. He does fantastic. Our benefit of reviewing this is two things: One, we get to see you a little bit more frequently, and I know a little bit more what’s going on financially, so I wanna make sure I’m looking at your return. In fact, we look at 37 different things on your tax return, ’cause I wanna make sure from our perspective that things are set up correctly. That’s the first thing we wanna do.
Micah Shilanski: The second thing is: John does a great job looking through the rearview mirror about preparing your taxes for last year, but my job is to look through that windshield, right? My job is to look at the next 10 years and then say, ‘Great, what do we need to do in the next 10 years to help lower your tax bill?’ And really, your tax return helps me a lot with that. Is that gonna be okay?”
Matthew Jarvis: I love that.
Micah Shilanski: Who says no to that?
Matthew Jarvis: Yeah. Now, Micah, and part of that checklist that process is: How are clients going to logistically get the tax return to you?
Micah Shilanski: Sure.
Matthew Jarvis: How are they gonna… And so you just need to think about this by groups of clients. Some of our clients, we say, “Just bring them in during Surge, bring them into your next client meeting.” Others we say, “Hey, stop by the office and we’ll make a copy.” Others have a PDF and we can say, “Here’s the link to our secure portal. Go ahead and upload those documents to the portal.” Others still have friendly CPAs, and we can say, “Hey, just forward this email to the CPA,” or, “I’m gonna email the CPA, they’re gonna want your permission,” and then they’ll send me a copy of the return.
Micah Shilanski: Yeah, knowing that, having your relationship manager know that it’s going to be key. Jarvis threw something in there that I wanna make sure we’re pulling out right there. He said, “You’re not asking the client to email the tax return, you email them the link to the portal,” right? Don’t email them and say, “Go upload it,” that’s not adding any value. ‘Cause they don’t know where the link is, they forgot what the name of it’s called, ’cause everyone is different, and so they’re just gonna email you the tax return, now that’s a security issue. So any time you’re requesting a document for them to upload, you put the link in the email when it goes out.
Matthew Jarvis: Micah, can I stress something right here, which is: If you’re emailing your clients asking them for their tax return and they don’t send them, and you email them again and they don’t send them, and you email them again, and they don’t send them, stop emailing them. This isn’t…
Micah Shilanski: I would send the four emails, you gotta do the fourth one, right? Come on, you just gotta keep going.
Matthew Jarvis: Stop emailing them if this… And this is for tax returns, it’s for everything. If this channel of communication is not delivering the results you intended, it’s the wrong channel. This is where after the second or third email, your team is getting on the phone with him, “Hey, Mr. And Mrs. Client, Matthew really wanted me to check, make sure you just got your tax return, because we wanna check for 37 potential areas of mistake. We wanna make sure we’re planning ahead for this year. We wanna make sure we’re planning for RMDs in a couple of years. Can I walk you through the process of getting this to us? Can I send you a pre-paid envelope and you can mail it to the office and we’ll scan it in, and we’ll send it back to you?” Don’t keep beating that same drum, please.
Micah Shilanski: Yeah, our office rule is two emails, that’s it.
Matthew Jarvis: I love it.
Micah Shilanski: Two emails, and then you pick up the phone and you call the client, right? So if that’s one email back, the client responds, then you respond back, that’s it. Any other question from the client, any other failure to move forward in progress, that is picking up the phone and calling. This is super, super important.
Matthew Jarvis: Love it, I love it. So Micah, the client sends in the tax return, or the prospect sends in the tax return… I think here’s the other mistake advisors make that I’ve made in the past, which is: It goes into their file and then it just sits. And eventually when we get a client meeting we’re doing a value add, we go back and kinda look at that, but it’s become too far detached for the client. “I sent Micah my tax return and nothing happened,” right? This just goes back to the dishwasher rule. When we get the tax return, we wanna make sure that we’re taking action right away and setting the expectation for when we’re gonna take action again.
Micah Shilanski: Yes, very, very important in that. So in our process, right, that was the first thing that we talked about, you gotta create a process for this. After we get the tax return, it gets inputted into the system and it gets flagged by the advisor to review. And so there’s a task out there, then what my RMs do, ’cause I don’t like task, because I don’t like people telling me what to do, they put it on my calendar ’cause mentally that’s fine with me. So they put it on my calendar for me to review tax returns. And again, time management, right, I do these in bulk. They create a whole list of returns for me to review, they get links to them, so all I gotta do is click on that appointment link.
Micah Shilanski: I click on the link, it brings me to the client tax return, then right in there, underneath that in the notes, I’m firing in everything the client needs to do in their tax return. Perfect, this looks great. We’ve reviewed the 37 things, everything is fantastic, right? Or saying, “Hey, I don’t think the QCD was in there, looks like the rollover was mis-flagged.” Or, “You know what, the client is very charitable, next year they’re 70 and a half, I want them. Let’s start QCDs, let’s talk about that.” What? We just found one, the client missed two RMDs on their tax return, literally just before this podcast, we pulled that one up. They missed two RMDs, great news is we did the RMDs, they just didn’t put it on their tax return, so that was the Oh crap moment for me?
Micah Shilanski: The RMDs were processed, but they didn’t put them on their tax return, so great news, they’re gonna get a refund, right? Because we had taxes withheld, so I’m gonna find all of those things, and then my RMs are gonna take that and then they’re gonna go back and send an email to the client, summarizing my notes. Number one, they’re gonna spell things correctly, so that’s a huge value add right there, but then they’re also gonna have it in just a nice little format that’s there. So this frees up my time versus if I had to pull up an email to every client and be like, Alright, what’s going on with Bob and Sue? Let’s think about this, it’s just gonna take longer and I’m not gonna add as much value versus if I’m in the grove of reviewing tax returns, I just want brass tax notes going in there, my RM team is gonna pick that up and now deliver that to the client.
Matthew Jarvis: Micah, I wanna pull out a couple of productivity efficiency things that you mentioned there almost in passing, but these are critical when we look at the distinction between advisors that are running a highly effective, highly efficient scale of practices, the two things that you mentioned that I really draw, one, you said your team had a list of the tax returns you needed to look at, and there was links on that list. Now you might think the listeners are saying that’s not really a big deal, all Micah would have to do is have the list of names, log into the CRM, type in their name, click the link to their client file, pull it up. And so you say, well that’s only four steps, maybe that’s 30 seconds, but it’s about 400 chances for Micah to get distracted and say, “Hey, maybe I’ll look through the notes, maybe I’ll do this, maybe I’ll check my email in between.” So it’s not just the time savings, which is huge, it’s I want to avoid any chances that I’m gonna get distracted while I’m on that project.
Micah Shilanski: I also… Jarvis you’re 100% correct. I also wanna get the team earmarked for the most efficient use of my time, right? Of saying, how do they get better at getting the most value out of Micah, because if I’m distracted and I’m not paying attention and I’m not really answering their question, they’re not getting the most value out of that time. How do we focus it when they’re coming into my office, what is everything they need to have ready to get the most value out of Micah at that time, to answer all of their questions to deliver the most value to them and to the clients? So this is a continual process.
Matthew Jarvis: Yeah, sounds a lot like Parkinson’s law, by the way.
Micah Shilanski: Fancy how that works.
Matthew Jarvis: Something that we talk about all the time.
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Matthew Jarvis: On the note of tax returns, Micah, you and Steven are gonna talk about this. Steve and Jarvis CPA, are gonna talk about this a lot this week in their RTS power session. But I’m trying to think, when was the last time you looked at a tax return, Micah and you couldn’t find a spot to deliver value or at least flex the dishwasher rule.
Micah Shilanski: Well, and not flex the dishwasher rule, boy…
Matthew Jarvis: That builds to either deliver a value or flex the dishwasher rule.
Micah Shilanski: I’d really have to go back some time. All of the returns, I’m commenting on is something positively, that’s gonna be there, even simple ones, they got two pensions and social security and no RMDs coming in yet, we’re always talking about it. Jarvis, oh here’s an easy one. I was talking to a client the other day and we were talking about the dishwasher rule, their return was great, they were putting everything in place, but they were making quarterly tax payments ’cause they preferred to do that versus withholdings whatever works for the client. And I said, “Hey, just a reminder, I know we talked about this before, but when you’re making your quarterly tax payments… ” And she got so excited, she interrupted me, she’s like, “No Micah, I do it, I do what you told me and it seems great.”
Micah Shilanski: Because the first payment, I ended one, the second payment I ended two, the third payment I ended three, right? And she’s like, this makes it so easy to track. I love it, every time I write those checks. Now, imagine the client’s experience from making quarterly tax payments, which is a pain in the the butt, she actually likes this because now she has a mental hack to track how these payments go through, so it can be very easy, things like that, but they deliver so much value to the clients.
Matthew Jarvis: Boy Micah, we can do an entire podcast, unless you’ve changed something, the estimated payments, which could feel like a burden, it could feel like I have to, it could feel like I’m out of control on this to the client now has control. Now the control is limited to the last dollar of the payment. That’s okay, you’ve still given them control in this situation where before they had none. Not to keep beating on this drum on the Otis webinar this week, there is a hand out that you and Steven have that’s a client-friendly guide to making estimated tax payment.
Micah Shilanski: That’s so helpful.
Matthew Jarvis: That Micah we print it out, we have our Jarvis Financial logo on it, we print it out and give it to any client doing estimated payments, we give them that guide so that they have something tangible to remember, “Oh that’s right, the last dollar. That’s right, I shouldn’t send a check, I should log in, and here’s the screen shots of the login process.”
Micah Shilanski: The other thing, and we’re gonna talk about this on the webinar too, the other thing that our team will do whenever we’re giving that out at the very last of it, says, or as you said at the very beginning of it, the email when we send it, says if you have any problems with this, let us know. We’ll do a share screen and walk you through it, right? So if the clients come in with any problem whatsoever we’ll do a Zoom, they’re on their computer, we’re just doing screen share and we’re gonna walk them through every step.
Matthew Jarvis: I love it. Five star tip on this, here we can just… I love… Micah and I took a break from recording episodes ’cause we were in Surge, so excited to be back in this. Steven has a video where he’s doing a walk-through of the online payment portal, which you could use as an advisor, “Here’s a CPA we use, you can use.” Or five star tip, you go through and do it yourself. Now, you need to be careful. You need to know how to do this. A loom video is perfect for this ’cause you can always go back and delete it. Hey, Mr./Mrs. Client, here’s a quick walk-through of how to use this portal, and it’s me walking through how to use the portal, now I’m doing this carefully, so I’m not typing in my social security number on the recorded screen, but you can get that with some screenshots and so forth, incredible value add here. Whereas what does the CPA do, Micah? Here’s the paper voucher to fill in your… And half the time, the dollar amount is on or it’s a completely made up dollar amount.
Micah Shilanski: Or it’s just software generating, it’s no… In those quarterly tax payments that the software comes up, it’s not related at all to the client achieving any of their goals whatsoever, and the clients don’t even understand it, they’re like, “Well, I owed $5000, how come I’m making $3000 in quarterly payments?
Matthew Jarvis: Yeah.
Micah Shilanski: This doesn’t even make any sense.
Matthew Jarvis: Yeah, that number is the protected estimate, which may or may not be relevant to them. So I just, I know we’re going deep on this, but there’s so many places here to demonstrate and to deliver a massive value on just the tax or… We have even talked, by the way, Micah, about any actual tax strategies, we’re just talking about, are you reviewing to make sure their information is correct, are you highlighting where you help them and where they’re taking action based on your recommendations is amazing value add here.
Micah Shilanski: I love it. One of the things, I’m sorry, I’m just on my soapbox on this, Jarvis, just going through it, I wanna make sure we’re talking about on those quarterly tax payments, when the clients are making them, right? One of the big things that I love to do with my why, why do they end them in one, two, three, and four, right, ’cause it seems like such a trivial thing. One of the things I’ll ask, “Has the IRS ever lost one of your tax payments you’ve made?” and then, “Oh my gosh, yes, they lost it, and it was a nightmare to find it and… ” And I said, “You know what, unfortunately, that happens and it’s happening even more right now, ’cause the IRS is so behind now by lost payment, what that really means. And tell me if I’m wrong, that they took your money and deposited it, they just didn’t credit to your account, then they sent you an astrogram said you owed more money.” They’re like, “That’s exactly what happened, Micah.”
Micah Shilanski: Because it’s happened to me. I know this, this is great. Here’s the hack in which we’re gonna do, because when the IRS takes up, we don’t know which out of the four payments they lost ’cause they’re all for a $1000, so we’re gonna change the last dollar amount in each one, and then all of a sudden when we see the deposits, and we see $1000 one, $1000 two and $1000 four, and we know they lost that third payment, we can find it super easy to let the IRS know, and it’s gonna make it a lot less painful. Is that gonna be okay? They’re elated because we’ve taken a real life pain point and solved it.
Matthew Jarvis: We could take this another step further, your clients that have to make estimated payments, right, that you can’t do other withholdings, etcetera, set those aside, but you’d have a process in your CM to remind them the week before… A week before it’s due, quick email, “Hey, just a reminder. Estimated payments coming up, here’s our video, here’s our print-out guide, if you need any help at all with this, let us know, we’re really glad help.” What CPA has ever done that? Let me give you a hint. It’s none of them, right? So you’re delivering this value that no one else… You’re not competing with the CPA here. You’re delivering value they’ve never experienced before.
Micah Shilanski: One of the things I’m gonna throw a shout out to Fidelity and Schwab and all those other guys, I’m sure you’re keen to listen to every podcast that we drop, I would love it in our systems is from a non-qualified account, if we can push tax payments to the IRS, right. There’s other issues you need to figure out with the SCC, but if you would do that for me, that would be an amazing value add. Imagine if we could just set this quarterly tax payments on our end, super easy, or in just like a withholding from an IRA distribution where you may be holding from an or qualified account and we could send that money to the IRS, oh my gosh, that would be great.
Matthew Jarvis: That would be, that would be. Well, in the episode here we’ll go advocate for the next 40 years again because it is starting to…
Micah Shilanski: Since that will never change. Sorry about that.
Matthew Jarvis: Micah, stepping back a little bit off this. So I want advisors who don’t feel versed in taxes to realize that you can deliver so much value without having this incredibly deep knowledge, now there is a lot of value to have an incredibly deep knowledge, but you don’t have to go straight to the deep end, these little things like making sure their information is correct on their tax return, giving them the estimated tax payment guide, these are things… Even if you’re in a super strict compliance environment, almost every compliance environment I’ve seen will let you hand them a third part of it is, “Hey, we’ve found this piece from a time of Tech Services on estimated tax guides, I just wanna give us to you as a value add.” Perfect.
Matthew Jarvis: Yeah, please.
Micah Shilanski: And one of the things too, I’m gonna pick on a Christian, my junior in the office who is doing a phenomenal job, and he came in with virtually zero tax knowledge in the business as he has a CFP, but really no tax knowledge outside of that, and that was one of his big concerns is, “Holy crap, I got a review… ” He had to review like 150 tax returns this Surge, and so he had to review a ton of returns. He’s like, “How am I actually gonna do this?” And is it simple? We’re gonna create a checklist, and this is how you’re gonna review every single tax return. And it’s amazing kinda 80, 100 into them, he’s like, “You know what? We’re getting the hang of this.” Now, is he a tax expert? By no means yet, he’s working that direction, but one of the things is he can add so much value to clients and meetings because he knows what to look for, because we work in a niche. So he doesn’t have to know everything about the tax code, you don’t have to know everything about the tax code, we gotta know things that are appropriate to your clients, so we get to narrow the entire tax code, the 30 to 40 things that we need to be watching for in a client’s return to deliver massive value.
Matthew Jarvis: Micah, I love it. There’s just, there’s so much opportunity here. Micah, if we pivot just a little bit to how this applies to prospects, and so we talk to advisors a lot of times… Well, two things, how it applies to prospects, and then what Micah advisors should do who never requested tax documents before, so this is a hurdle to tackle. With prospects, they don’t know any differently, so I’m just gonna tell them, This is what you need to be… In face, I don’t tell them, my team sends them a list, Here are the seven documents you need to have for a medium investment statements to state documents, the last two years tax returns. If for some reason you can’t have these documents together before our meeting, please let us know and we’ll reschedule that depending on the situation.
Matthew Jarvis: So we’re just gonna tell them it’s given. Now, I’ve had prospects, Micah, say, “Wait a second, I’m interviewing four advisors, and none of the other three have asked for my tax return.” And I say, “Really?” Because by the way, in my heart of hearts, my mind is blown that there’s anyone calling themselves in advisor not doing tax plans. So I kinda in my heart of hearts say, “Really? That really surprises me. How are they gonna make sure you’re not overpaying taxes in retirement, how are they gonna tell you how much to withhold in taxes when you claim Social Security, how are they gonna tell you if you should be doing IRA contributions or Roth contributions, Mr and Mrs. Prospect, I just can’t believe this. Are you sure they didn’t ask?” And now I’m head and shoulders above everyone else.
Micah Shilanski: Yeah, so giddy when you said that, right, I love that aspect in the competition side, when there’s other advisors that are out there as well, I just had one this last week, they were interviewing Fisher, they were interviewing someone in the East Coast and then myself, right? Alright, well, Fisher, they’re just a money manager, they don’t do… From anything I’ve seen, they don’t do financial planning, clients don’t know that by the way, right. Financial planning means all of us, but we asked for their time return, and that was the biggest thing that they brought up Jarvis in this meeting was saying, “Well, why did you want our tax return? ‘Cause we already have a CPA that does this?” And I found a glaring error on their tax return, so number one, I was able to find some massive value, just a quick conversation with them, they were missing something in their tax return, and then number two, they were getting this first supplement, basically this extra Social Security income that they’re not eligible for, and I said, “So when you talked to Fisher and you talked to this other advisor, did they mention anything to you about this penalty on the first supplement?” They’re like, “No, they didn’t mention anything.”
Micah Shilanski: Fascinating, you know what? I was able to walk through their benefits and basically they gotta repay a whole bunch of benefits they’re not entitled to because I had the tax return, and because I could see this, there’s a clear separation now and the end of the call, she’s like, “No, we’re just moving forward with you.” Because we didn’t hold back. I’m so on a soapbox with this. We didn’t hold back and say, “Well, you gotta come back in and I’ll tell you the secret answers after you hire me.” It’s like, “No, these are problem points. Hire me or not, you need to go fix these things.”
Matthew Jarvis: I wanna highlight one little small thing, Micah, and then let’s pivot to advisors that are changing gears. Sometimes, Micah, when you and I are describing these things on the podcast, we get really excited. And if I’ll confess, we get a little bit snarky with some of this stuff.
Micah Shilanski: Sure, fair enough.
Matthew Jarvis: Never in a prospect meeting are we snarky about this, never are we facetious, never are we sarcastic. And it’s sincere. It’s not a marketing sales thing, it’s from my heart of hearts, “Mr and Mrs. Prospect, there’s a mistake that’s been made on your first supplement. We have to get this fixed. Whether you work with me or not, you’ve got to get this fixed.” This is coming from a place of pure authenticity, so I just wanted to highlight that.
Micah Shilanski: Yes.
Matthew Jarvis: You and I get really excited when we’re on this, we’re like, “Oh, gee-whiz, I can’t believe this is going on.” That’s not ever how we would talk to a client or prospect.
Micah Shilanski: Yeah, in my mind, I get a little irritated at the other advisors ’cause I’m like, “How did you miss this? It’s so glaring.” But again, to your point, does that add any value to the client? Absolutely not, right? We need to deliver that value, so thank you for drawing that out, Jarvis.
Matthew Jarvis: Yeah, I just wanna highlight that. Okay, Micah, advisors who have never asked for tax returns before, how do you shift… Again, now you’ve got not only all these things we’ve mentioned already, but the client say, “Wait, you’ve never asked for my tax return before, what’s happened? Were you missing something before?” Which is our head trash, right?
Micah Shilanski: Oh, totally, right? Because we didn’t ask for it, we should never ask for anything because it’s the way we’ve always done it, we should never change to anything new, ’cause that way, we’re safe and we don’t look incompetent, right?
Matthew Jarvis: That’s right.
Micah Shilanski: Okay, no, obviously, we know that’s not the case. You know what, Jarvis? I love your CD player analogy, really, that you give out with clients. Walk us through that one.
Matthew Jarvis: Yeah, I’ve used this when I’m doing fee increases, when we added a junior advisor, when we’re changing investment models, we say, “Mr and Mrs. Client, do you remember when you bought your first CD player?” Now, by the way, if you work with really young people, you’ll have to think of a different example, but this works for me.
Matthew Jarvis: And they’ll say, “Yeah, well, it’s so much better than tape decks and we kind of were nostalgic about that.” “Mr and Mrs. Client, when was the last time you used the CD player?” “I don’t, I haven’t for years.” “Perfect. When we recommended this, when we started working together, that was the best thing available. Like the CD was the best available. Now there are better things available, and this is the new way, so I’m always going to recommend for you the best options for you, we’re always on the lookout for things that will do a better job. This is now the best way.” And they say, “Perfect, wow, thank you so much, Matthew. We weren’t even aware that this had changed.”
Micah Shilanski: You know, and how I would apply that on the tax side of the equation is saying, “You know what? I know your CPA is doing a phenomenal job, preparing your tax return,” and if… ‘Cause I really believe that, right? ’cause if I didn’t believe that, I’d be telling them to change CPAs. Or, “You know what? You know, you do a great job preparing your tax return every year, but now as the laws change, then it’s something that we wanna help review to make sure you stay on top of it, and we have 37 things we wanna make sure and we need to talk about our tax planning.” So I like to couch it in two ways, one, I love that CD player analogy, right? What has changed, right? In reviewing the tax return, and then number two, we need to do tax planning to say, “Look, if Congress does… ” This is a my political joke that I’ll say in meetings, right? I’ll say, “Look, if Congress does nothing, of which they’re good at, tax laws in three years expire and your taxes go up. That, we know, that’s the law today. So if we know taxes are gonna be higher in the future, does it make more sense to pay taxes today at a lower rate or tomorrow at a higher rate?” “Well, today at a lower rate.” “Great. The only way I know that for sure is if I have your tax return. I gotta look at that and I gotta be looking forward in the tax planning in the future to make sure you’re not overpaying in taxes.”
Matthew Jarvis: Yup. One other line I’d use on that is say, “Mr and Mrs. Client, I’ve been working with clients for the last 13 years.” However many years it is for you, “And what I’ve noticed is for almost all of my clients, their biggest single expense is their tax bill. Because of that, I have now been trained extensively on taxes through the perfect RA, through retirement tech services, through Ed Slott, through whatever, and now I am able to help make sure that you’re not overpaying the IRS in retirement. So we’re positioning… I wasn’t dropping the ball before, we’ve just found a better way. We’re now at the next level, so don’t let that scare you.” And Micah, if we had time, we would jump into a whole soapbox on, “This is a great way to deliver more value in preparation for your fee increase and the $250,000 challenge,” which will unveil in June, I believe.
Micah Shilanski: Whoo. Sneak peek on that one.
Matthew Jarvis: Whoo. Whoo.
Micah Shilanski: Alright, so this podcast is all about action items, so let’s go ahead and jump into some action items. And Jarvis, I’m gonna say the first action item is you need to create a process. You need to create a process. Now, don’t let this be such an elaborate process that you never get around to doing it, that was pointless, right? But make a simple seven, nine-step process, this is great. How are you gonna get the return? Who’s gonna handle it? How are you gonna walk through that? And if you don’t know how to do that, then you need to jump on the Retirement Tax Service Power Session for the webinar coming up ’cause we’re gonna talk about that.
Matthew Jarvis: I love that. And it doesn’t even have to be in your CRM, ideally it is. This could be an Excel document that you’re tracking it on, this could be… But it needs to be a process. Micah, you mentioned the Retirement Tax Services Power Session, you go to retirementtaxservices.com/welcome to sign up for the power session this week with Steven and with Micah. Among other things, they’re gonna go through that 37 point checklist, they’re gonna go through the letter that we send to clients to get them to send their tax returns, they’re gonna through that estimated tax payment guide, they’re gonna go through tax birthday’s milestones. Micah, I don’t know how you’re gonna get all this in in 60 minutes, but I am excited.
Micah Shilanski: I don’t know. We’re just gonna fly. Oh, come on, it’s like a CPA meeting about taxes. We’re just gonna geek out for an hour. It’s gonna be so funny.
Micah Shilanski: And by the way, five star tip, I tell clients, I geek out about taxes and I get giddy and excited just like this, and they laugh, they call me a nerd, and they’re like, “Micah, I’m so glad we have you to geek out in taxes.” And I’m like, “What? You don’t read tax code on the weekend?” Because I do. And this is literally, I literally do on the weekend when there’s something new that comes out, I will read tax code, I find this fascinating. I share that with my clients.
Matthew Jarvis: Yeah. Last action item I would put on there, Micah, feel free to add another one, is you gotta go get your tax returns from every client and every prospect. This has to be a non-negotiable, has to be like buckling your seat on the airplane, getting your blood pressure drawn at the doctor’s office. This is a must-have. You’re doing this egregious disservice to your clients and your firm if you’re not having a tax focus.
Micah Shilanski: Amen, you gotta get it done. Perfect. Guys, as always, until next time. Happy planning.
Matthew Jarvis: Happy planning.
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