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We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.

Steven Jarvis:     Hello everyone, and welcome to the next episode of the Retirement Tax Services Podcast, financial professionals’ edition. I am your host, Steven Jarvis, CPA, and in this show, I teach financial advisors how to deliver massive value to their clients through tax planning.

We have a first on the show today. My guest has a huge emphasis on tax planning, but not U.S. tax planning.

Really excited to have a different perspective here today in the form of Joe Curry, who is a financial planner with Matthews & Associates, which is based in Peterborough, Ontario, Canada. And he is also the host of his own podcast, Your Retirement Planning Simplified. So, Joe, welcome to the show.

Joe Curry: Thanks Steven. Excited to be here today.

Steven Jarvis:     Yeah, it’s great to have you on. I always love hearing from different people so that we can really hear what works in practice. And before all of our U.S.-based advisors say, “Well, I don’t need to learn the Canadian tax code,” I’m not here to learn the Canadian tax code either. I’m here to learn from people who are committed to doing tax planning and delivering massive value through tax planning. And from everything I’ve heard about what Joe is doing, he is somebody I want to learn this stuff from.

So, Joe, to start with, why don’t you talk about kind of what led you to adding tax planning to your practice? Because as I understand it, similar to all of us here in the U.S., tax planning for financial advisors is very much the exception, not the norm.

Joe Curry: Yeah, same idea in Canada, but I guess I started my career more in insurance sales, like a lot of other financial advisors, but was really drawn to the financial planning side of things because just felt like there’s a lot more impact I could have for clients.

I started the business with my dad actually but I found another firm, so Matthews & Associates, no relation to Curry, my last name, of course. But it was another advisor who did retirement planning for his clients. He also did life insurance sales and some employee benefits, stuff like that.

But I really liked what he was doing with the retirement planning, but I really wasn’t interested in kind of all the side pieces of the business, and I thought I could add a lot more value to clients if I really focused on one type of client in one area, and it was the financial planning for retirees that I really wanted to focus on.

So, anyway, I bought that advisor out and moved out the employee benefit piece, kind of one-off life insurance stuff, like I don’t do any of that anymore. And I really focus on clients that are in retirement or just ahead of retirement.

And because we refer to so many clients, we really narrowed down who we were working with and it allowed me the time to provide additional value. And one of the areas I found that I could add more value than probably anywhere else, including investments, was in helping clients save money in taxes.

So, the last several years that’s really been a focus, is refining that process and finding ways to help clients save money with taxes.

Steven Jarvis:     Yeah, I love that. I love the intentionality behind that and that focus on really what’s the value for the client. I know you’re also a fan of our friends over at The Perfect RIA, and that’s one of the things that even as a CPA, not as a financial advisor for myself, that’s what I’m always listening for from those guys, is that emphasis on what makes the difference to the client, what’s going to help move the needle.

You mentioned in there having a process for tax planning. So, talk a little bit more about that. What does that look like for you? How often do you bring this up to clients? How are you bringing it up to clients?

Joe Curry: Yeah, sure. So, primarily, we’re grabbing our tax returns from clients after our spring review meetings. So, we batch most of our reviews much like our friends over at the TPR in the spring and the fall.

So, at the spring meetings, we’re reminding clients we need to get those tax returns and I’m really taking a deeper dive into those usually in August or September, which is when we’re starting to get ready for our fall review meetings. And I have a checklist with all the different kind of tax planning opportunities that might be available to our retirees or clients that are near in retirement.

And so, I just have that checklist with me while I’m reviewing clients’ tax returns, and then whatever I’m identifying on that checklist as I go through the tax return is going on the agenda that we’re preparing for their fall meeting.

So, that’s the main piece of the process. We just actually introduced Nudge is a software into our, I guess, our process. And that’s something that just sends out some gentle reminders to clients, and we found that’s starting to help clients be a little more efficient in getting us the tax returns.

And we’re trying to take that a step further now. And I think it’s similar in the south of the border, but we’re working on Canada Revenue Agency, getting approved so that we can actually just go into client accounts and look at their returns, pull all their information so we can just save them the step and add some more value. So, that’s kind of our next step, where we’re hoping to go.

Steven Jarvis:     Yeah, that’ll be interesting to see if you get to a point where they allow you to do that. We have an option — in the U.S., for our listeners, it’s form 8821 that you can get permission to get some information directly from the IRS.

But there’s definitely a time lag to it. It’s not as smooth as I’d like to be. There’s some value there, but I’ll be interested to follow up with you when that has some movement, we can compare notes.

Joe Curry: Sure, sounds good.

Steven Jarvis:     Yeah, so you mentioned this stuff you’ve been doing for several years, but you’re still looking for ways to kind of keep clients being consistent, which I think that’s a struggle we all have of getting clients to follow through on, “Hey, to be able to do the tax plan, we need the tax returns. We got to be able to see the data. This can’t just be an abstract. Well, I think you should go do X, Y, and Z.” We need the actual information.

So, there’s the one piece of it of getting the clients to follow through, but there’s also the piece of getting clients on board with even the idea of it. Do you have clients that push back on you or when you first introduced this, did you have clients that push back and said, “Hey, I’ll go to my tax pro, this isn’t your realm?”

Joe Curry: Yeah, it’s a great question, actually. So, anyone that I’ve added in the last several years while I’ve been doing this type of planning and incorporating it right from the start, there’s no pushback. I mean, from day one, we get those returns and that’s just the way it is.

So, where I get some pushback is usually from clients who were either with me previous or even with the advisor, actually more specifically with the advisor, Randy, who I bought the business from. And it’s not that he never got tax returns. He did look at tax returns and do some planning around that, but it maybe wasn’t emphasized as much.

And so, some of the clients that weren’t giving him tax returns are the same ones that would be more likely to give me some pushback on that. But one of the things that I’ve done in the last couple of years is from what I know about the client situation, because even those clients — I still have a pretty good idea of everything that’s going on.

So, I took the tax planning checklist, identified the opportunities that I thought might be applicable to those clients and made some notes about why I thought it might be applicable, how we could potentially save some money, and then in order to really verify any of that, we would need the tax returns.

And I sent that out as one of our kind of value ads, part of the planning process that we send out. So, we sent that out and that helped us actually gather a lot of the kind of final tax returns that we weren’t getting.

Steven Jarvis:     That’s really interesting. I like that approach because we have a couple of different checklists and tools that we provide to members of RTS that they can use with their clients. But usually, we talk about it in terms of, “Hey, go out and get the tax returns, then here’s the tools you can use.”

I really like that idea of great, if you’ve got clients who are hesitant or who aren’t following through, go ahead … and I’m sure you’ve got some disclaimers in there, some wording in there, of, “Hey, I actually need the data” but that’s a great example of how to demonstrate value before, as you’re asking the client to do something.

Say, “Hey, here is the actual checklist that I’m going to use. This isn’t some deep, dark secret. I’m just going to show you here are the potential areas and these are things we can work on together if you give me that tax return.”

Joe Curry: Yeah, exactly. I mean, I think you said it’s demonstrating value. So, it’s hard to demonstrate that value when you don’t have the tax return to show someone.

But on the same hand, when you deal with all the same types of clients and that’s where a niche can come in handy, is you have a good idea of what those clients are dealing with or what those opportunities might be. So, you can kind of pretend to demonstrate the value before you actually have the information or guess a little bit, but it’s usually going to be pretty accurate.

Steven Jarvis:     Yeah, there’s so much great, great insight in there. I really like that. One of the other things that stood out to me as you were describing that is that sometimes I’ll talk to advisors who are interested in tax planning, but kind of are overwhelmed by the idea of making that transition because in their heads, they’re thinking, “Okay, I’m going to reach out to my a hundred clients and ask for tax returns and the next day, all 100 of them, are going to send me a tax return. I’m going to have no time to actually do all that.”

Well, great news (well, sort of great news), your clients aren’t just going to send them all at first. That’s one piece of it. It’s going to take time to even get them. And even if that were to be the case, you can take this … it sounds like you kind of took a twofold approach of maybe emphasizing more with new clients and then slowly working on legacy clients to get those habits in place.

So, for our listeners, don’t let kind of this almost specter of what that time commit is going to be overwhelm you initially. Yes, tax planning does take time, but you’re going to have time to build out the process and get the reps in.

Joe Curry: Yeah, for sure. And another big part of that too is doing like the search review process. So, having all those meetings bulked together in the spring and in the fall, it allows you time to work on like planning projects, things like that.

Whereas if you’re trying to meet with a couple clients every week, it’s hard to jump back and forth and really dive into that. And I guess part of the TPR Podcast talks a lot about that, but that’s a huge … not just in getting tax returns, but just in all areas of my business, has really helped me deliver more value to my clients because I’ve been able to time block different months or different weeks to just focus on these projects.

Steven Jarvis:     Yeah, that might feel a little tangential to tax planning, but I think you’re really driving home an important point there, that tax planning is going to take additional work. You need to have the time to set aside, to build out these processes, to make sure that you can involve your team, that this is going be successful and valuable for the client.

And I don’t know of another better way to do that outside of surge meetings, that being able to focus your client meeting time into specific times of the year, so you’re freeing up other time to deliver more value to your clients.

Yes, a lot of times surge meetings get talked about in terms of how much time can I take off and that is a great benefit of a surge meeting, but the advisors I work with who are the most gung-ho about tax planning are the ones that are doing surge meetings because they have the time to dedicate to improving and implementing the process.

Joe Curry: Absolutely, yeah. Couldn’t have said it better. And I mean, I guess for anyone else thinking about it, the other thing is always like you could just figure out who are my top 10% of my clients or top 20%, and start with that and put it out in waves maybe a little bit, having that conversation with clients. You don’t have to start with every single client.

And I guess the other thing, like I said, was really getting focused on who I was serving. It made it a lot easier too. So, really limiting the number of clients we were working with, referred a lot of clients so that we could have that focus and really, again, hone in on who we were good at working with.

Steven Jarvis:     Yeah, tax planning can give you another really good objective measure on narrowing down your niche. If you’re still not at the size of client base you ideally want to have, that can just be another metric that you’re looking for, of okay, if they don’t fit inside these parameters, I don’t have the expertise to help with that type of tax planning, so maybe they’re better served somewhere else.

Joe Curry: Exactly.

Steven Jarvis:     So, Joe, on your website, in the services you list, you list tax planning, which is great. I feel like I’m seeing more and more people list it on their website. I love to hear that you’re actually doing something about it, because I think there’s still a disconnect there sometimes.

But the very first question you list is how do I know if I’m paying too much in tax? And I would love to just kind of hear your thoughts on how that conversation goes with the client of just initially opening their eyes to this is a conversation worth having?

Joe Curry: Yeah, sure. So, I mean, it’s going to be specific usually to each client. Again, we’re talking to a lot of clients who have similarities, but we’re going to look at their situation, get an idea of what their income looks like, what their investments look like, what other assets they have maybe outside of a portfolio.

And based on what we’re seeing there, we’re just going to kind of get an idea of what the strategy, the client has around saving taxes. And 9 times out of 10, there is no strategy.

So, that’s when we’re talking about asking questions, if you have money left in tax deferred accounts, so stuff that happens to you — do you know that basically? So, in Canada, over half of that would go to the government.

So, we’re just trying to get an idea really of what they’re doing and what their knowledge is. And then we can kind of guide, I guess, the conversation or the planning from there and look at where there might be some opportunities.

Again, it’s going to be pretty specific to each person though. So, it’s more of a conversation to get things started and helping people realize what maybe some of these obstacles are they didn’t even realize that they had.

Steven Jarvis:     Yeah, that approach is so great for a couple of reasons. One, you’re setting yourself up to be able to educate the client in a way that’s helpful for them and not in a way that’s condescending. This isn’t, “Oh, look at all these things you didn’t know.” You’re helping them with “Here’s how we’re going to set you up for success.”

The other thing that stood out to me in there is that you’re learning from them and you’re having the conversation of what their current strategy is. Even though you said, hey, 9 out of 10 times, they don’t have a strategy — same for me and a lot of the advisors I talk to, and you can just make that assumption that, hey, they don’t have a strategy, let’s just dive right in.

But you’re setting such a better foundation and really setting the client up so much more for success by having this conversation: “First off, hey, what is your strategy for this?” Because then you’re letting them know, you’re letting them kind of come to this realization on their own that, “Oh wait, I should have a strategy and this could be a very, very large expense.”

Even if the percentages are slightly different between the U.S. and Canada, sounds like we’re kind of in the same boat that without intentional planning, taxes represent a massive portion of your expenses in retirement and potentially over your lifetime.

Joe Curry: Yeah, absolutely. And there’s opportunities there that people … so, I mean, you guys have RMD, so we have a similar thing. We have what’s called tax-free savings accounts. So, they’re like investment accounts. I can’t remember what you guys called them — Roth IRA or something maybe.

Steven Jarvis:     Yeah, Roth IRA.

Joe Curry: So, we don’t have huge limits on that, but often what’ll happen is maybe a client’s been saving in our equivalent of a 401(k), something like that. And they’ve never used any of these tax-free savings options or investment options.

So, they’re just thinking they’ll take out however much they want to take out of these tax-deferred accounts for all their retirement. Again, not knowing that whatever’s left in there, a good chunk of it’s not going to go to their family.

And also, not realizing that eventually, the government’s going to make them start taking a certain percentage out, which is probably more than they want, which might put them up into a higher tax bracket later on in life that they weren’t expecting.

So, we can start maybe taking some of those withdrawals earlier, moving some of it over to the tax-free savings if they don’t actually need to use everything that we’re taking out. We could look at tax brackets. And so, I think you guys talk a little bit about leveraging tax brackets.

So, we may look at what someone’s taken out. That’s how we decide how much more we’re going to take out of a retirement account, is how much can we push them up in that tax bracket that they’re in.

And in Canada, there’s also a government benefit, which is, you don’t have to contribute to it or anything like that. So, I’m not exactly sure how social security works, but in this case, it’s an income tax of benefit.

So, if your income is under roughly $80,000, you get the full benefit after age 65. But if you’re over that amount, it starts to get clogged back. So, they take some back. So, by taking some income from these tax-deferred or retirement accounts earlier on in retirement, they may not get pushed over that threshold. We may be able to avoid that threshold.

So, there’s different things, again, we can do like that, which often, they’re not even aware of. So, just having those conversations, making them aware of it, starts to get them more interested in doing the planning and get involved.

Steven Jarvis:     This is so fascinating to me because, yeah, as you describe that, and I am far from an expert on the Canadian tax code; there are clearly differences in how the tax rules work in our two countries, but the philosophy, the approach is almost identical.

It would be really interesting to have more U.S. and Canadian advisors compare tax planning strategies, because I think it would help people see that really with your clients, you need to be starting with kind of this logic, this “What are we trying to accomplish and kind of what’s this strategy?”

Don’t get lost in the details, don’t quote the tax code at them. If you start spitting out percentages, your client’s just hearing marshmallow, marshmallow, marshmallow anyways. People don’t think in terms of those numbers.

But what you’re really highlighting under either tax code is we’ve got to identify where do we even have the opportunity to make choices, because that’s where we come out ahead on taxes, is when we understand the choices available to us and we have an intentional plan for taking advantage of the choices that benefit us in the long term.

And that we’re not just thinking about taxes one year at a time, but that we’re looking over our lifetime or the lifetime of our wealth to say what can we do proactively to make sure that we or our descendants are keeping as much control of this money as possible to accomplish whatever our goals are.

Joe Curry: Yeah, absolutely.

Steven Jarvis:     So, Joe, as you think through kind of the evolution of tax planning in your practice, can you talk about how you’ve been able to involve your team in that process or is this 100% Joe does all of it from start to finish?

Joe Curry: Oh yeah, no. It’s I mean, I’m mentioning it in my client review meetings, just a reminder, we’re going to need tax returns. And so, in the spring, and we’re going to be looking at this in the fall, and I’m usually giving them a heads up of what kind of strategy we’re probably looking at for them. Because often, it’s the same thing, year over year, the same opportunity we’re capitalizing on.

So, we’re reminding them in the spring, here’s probably what we’re looking at, but we want to actually make the decisions in the fall, just in case anything unexpected comes up.

And then from there, it goes to the team and then the team’s following up with them to get those documents, to get the tax returns. And then they’re letting me know, like putting in the client file, letting me know when it’s there, and then I’m looking at it, I’m doing the checklist.

Sometimes, so last year, we sent out the checklist as a value add just to kind of show clients like here’s the checklist we’re looking at. So, you’re not necessarily going to do every one of these strategies, but here’s what we’ve done for you this year. Here’s a couple opportunities we checked off and it’s going to be on the agenda for the fall meeting.

So, the team sent that out. So, I did the checklist, but then they’re sending it out, addressing it to the client. So, as far as the planning stuff goes, I mean, I’m definitely doing that, but as far as actually getting the tax returns and if we’re mailing something out, that kind of stuff, that’s going to be the team.

Steven Jarvis:     That’s awesome. The more we can leverage our teams, the more we can spend our time on kind of our highest and best use. So, we’re leveraging our expertise and not spending time playing office or putting together mailers to send out to clients.

Joe Curry: Yeah.

Steven Jarvis:     I also like that you highlight sending out that checklist — and push back on me if I interpreted this wrong, but it sounded like you’re sending out the whole checklist and just identifying the ones that are applicable.

And so, the client can see, oh, hey, Joe looked at these 20 different things or these 30 different things, what I call the dishwasher rule of giving them the peace of mind that someone is looking out for them. That someone went through and marked off all of these things, even if they’re not relevant, but somebody’s looking at it. So, I really like that you take that approach as well.

Joe Curry: Yeah, that’s exactly the whole point of that. It’s just to let clients know that we’re not just getting your tax returns because we like to have extra paperwork or make it look like we’re doing something, but yeah, we’re actually looking at it. And there are different opportunities to save money with taxes. And while they may not all work out as an opportunity for you each year, we’re still going to look at it and here are the different areas we’re looking at each year.

Steven Jarvis:     As you think about where you’re at with tax planning right now, what’s the next evolution for you and your firm of continuing to deliver value through tax planning?

Joe Curry:          Yeah, so as I mentioned earlier, we’re working right now on getting access to client accounts, which I think is going to work out. And I know, I think you guys have rules around having to do so many tax returns. Like we don’t have those rules, I know that.

So, we should be okay as far as that goes, I’m not going to have to start doing tax returns. But I am kind of floating the idea right now of potentially at some point partnering with like an accounting firm maybe to have a more, I guess, closer relationship with client accountants and add that as more of a service that can run through my office.

If Retirement Tax Services was in Canada, I would be really excited about that but I don’t have that option at this point. But if I could have something like that, I mean, that would be, I think the ultimate option.

So, that’s kind of where I’m at right now. So, there’s nothing I guess, for sure, but it’s after hearing what you guys are doing, that’s kind of, to me, the ideal situation.

Steven Jarvis:     Well, I certainly appreciate the interest. Yeah, getting into foreign tax is not high on the list for us because there are some pretty specific differences.

Joe Curry: Fair enough.

Steven Jarvis:     But if you find that account in Canada who’s interested, I’m happy to let them know how we approach that because we’ve seen a lot of value by being able to collaborate directly. Because I would assume you run into similar situations that there’s the planning side of it and then there’s the preparation side and both are important.

I get more excited about the planning side, because for me, it’s more proactive. I can see changes we’re helping a client make in their life. But if it doesn’t get reported correctly, it may as well not have happened. Like we’ve got to take care of that compliance piece. We can’t ignore that or diminish the value of that.

Joe Curry: Yeah, it’s just that communication piece is huge because the clients where I can talk to their accountants and we get on the same page, we usually get on the same page and everything’s good.

But I know I can think of just top of mind a few clients where their accountants, I think they’re appearing to try to add value to their clients, but they just kind of throw out some one-off comments like “You should put more money into a tax savings account.”

But the client may be in a really high tax bracket and should be taking their tax deduction and we can worry about tax-free savings accounts once they retire and their tax bracket comes down about 15%.

So, tax-free savings accounts in Canada are great, but if we’re not taking advantage of some of the tax deductions and deferrals that are actually going to be a lot better for the client, then it’s not in their best interest. It’s more of a one-off comment.

So, when we can talk to those accountants, then it’s all good. Like I say, everyone gets on the same page and we know where the client’s at and we’re working together. But when we don’t have that communication, sometimes the client’s getting mixed signals and they don’t know who to trust and that makes it a little bit more difficult.

Steven Jarvis:     Well, the trees may be greener in Canada, but it does make me feel better that the grass isn’t necessarily greener on the other side because the same issue that we have here with tax repairs tend to be focused on this year and last year. You maybe find one who thinks about next year, but they certainly aren’t thinking 5 or 10 years out.

So, we run into those same issues of recommendations coming from tax repairs really focused only on the current year. And that it just misses the bigger picture of really how we come out ahead, how we make sure we don’t tip the IRS or tip the Canadian equivalent of the IRS. I actually don’t know what it’s called.

Joe Curry: CRA, yeah.

Steven Jarvis:     Yeah, so we want to make sure we’re helping clients keep a hold of as much of that, their hard-earned money as we can.

Joe Curry: Absolutely.

Steven Jarvis:     So, Joe, we always like to make sure that we are recommending action from the conversations that we have because information without action has no value.

So, as you think about kind of your journey through adding tax planning or what you’re doing right now with tax planning with your clients, what are actions you would recommend to financial advisors listening to this podcast?

Joe Curry: Yeah, so I guess I could do a couple that I know are helpful to me. So, one is, again, just getting clear on who your ideal client is and knowing everything you can about tax planning for that client. Then it becomes a lot easier rather than trying to learn everything every time you look at a new client’s situation.

And if the more you can narrow your client base, I think that’s going to be better for your business. You’re going to have more time, you’re going to add more value. It’s just better all around.

So, that’s one, and I guess maybe another thing is having that checklist and a process for looking at client tax returns so that again, you’re not trying to just think of opportunities as you look at the tax return, but you actually have a checklist to go by to make sure you’re not missing things. So, that way clients are getting the most value out of it.

And whether you’re coming up with an amazing strategy for the client or not, have the conversation with the client that you actually were looking at the return and the process you have for it so that they have that peace of mind to know you’re taking care of things.

Steven Jarvis:     Yeah, that’s a great list of action items, I really like that. That there’s so many benefits to having a niche focus, but being able to narrow down the tax code and only have to learn a portion of it as opposed to trying to get lost in the whole thing, that’s huge.

Having checklists and processes are helpful in so many areas. At RTS, we’ve actually become a Holistiplan super users, which I don’t think there’s a Canadian equivalent yet.

Joe Curry:          No, I wish.

Steven Jarvis:     You‘re going to have to ask them if they’ll make that version. But for us, it’s just such a great tool to kind speed up some of that initial process, then we add our expertise on top of that, but we’ve been real big fans of being able to use that.

And then I just love anytime people are going to highlight the dishwasher rule of making sure that you’re letting your clients know the great things that you’re doing for them.

Joe Curry: Yeah, definitely.

Steven Jarvis:     Well, Joe, really appreciate your time coming on the show today. It’s been great having you.

Joe Curry: Yeah, it’s been a blast, and I got to do the same thing, hanging out with your brother yesterday. So, back-to-back, it’s been fun talking to both of you guys.

Steven Jarvis:     Yeah, well, really appreciate your insight. For everyone listening, thanks for being here and until next time, remember to tip your server and not the IRS.

We’re not overpaying. No, we’re not overpaying. We’re not overpaying anymore. The tax code’s complicated, boring, and overrated. You don’t want that, you want a pro. One thing that you should know: this is a radio show. It’s not tax advice, don’t take it that way.