Read The Transcript Below:

Steven (00:51):

Hello everyone, and welcome to the next episode of the Retirement Tax Services podcast, financial Professionals edition. I’m your host, Steven Jarvis, CPA, and joining me on this week’s episode is Gary Russell of Helium Advisors. Gary, welcome to the show. 

Gary:

Thank you. Thanks for having me. 

Steven:

Yeah, always excited to have people on to talk about the overlap of financial planning and tax planning, and also I’d have to go back and count, but I’ve had quite a few people on my show where this is their first time on a podcast, so welcome to being a podcaster. 

Gary:

Yeah, thank you. No, I’m excited to be here. It’s a good first experience. 

Steven:

Well, hope we’ll keep that trend going. So Gary, why don’t you talk just a little bit about your background as an advisor in general and then let’s start into the conversation of why tax planning is such a focus for you and the importance for clients.

Gary:

So I am a co-founder and partner of Helium Advisors. I started off in the business in June of 2000 just doing financial planning for a bunch of people in the northwest and worked quite a bit with CPAs during that time, just working with them, we had a lot of Microsoft people with tax options and options they didn’t understand and tax ramifications of that. So kind of cut my teeth in that spent time at LPL after a brief non-compete. Met my business partner there at LPL when he was inbound from UBS and then we went on to actually run sort of multiple business units in a regional insurance firm that we were running for a long time and then founded Helium after that.

Steven: 

You’ve got really a range of experience as far as size of organization, structure of organizations. You’ve probably seen a lot of different things as far as what was allowed around tax planning and some of these different environments. And now you’re in this situation where under your umbrella you have multiple tax firms. 

Gary:

Yes. Yeah, I think that was our number one takeaway when we were leaving the firm that we were running priorly and yeah, it was absolute focus of ours from a tax perspective. Predominantly what we found was a lot of clients had all the professionals in their life. They had accountants, they had CPAs, they had attorneys, they had their priests, they had whatever it was that were their professionals in their parents that helped ’em. And I think what was really missing we found over and over again was just execution of all those things and having really a financial quarterback there to take it to hopefully some semblance of finality and executing on those the great advice that we’re getting. So that was a big part of us seeing a sort of missed area where we could fill in with our firm and have great CPAs and tax professionals on staff, which is all that integration is much easier said than done. So we learned a lot of lessons through that and now here we are and we’re still learning lessons. 

Steven:

Well, I certainly appreciate the honesty. I think sometimes it’s easy for people to get on a podcast, get on social media and just gloss over the hard work and trial and error that goes into anything that’s successful. So maybe share some of those lessons you’ve learned, some things you’re doing now that you weren’t before, which you’ve had to adjust along the way. 

Gary:

Yeah, I think really early on before we founded our own firm, there’s a lot of different, and I’ve heard a few guests on your podcast say it as well, this idea of working with CPAs and coming in and integrating and owning the firm, it’s going to be so easy and I’m going to just have clients walking in asking to work with me. And I think what we learned there was more of, it’s a very deep relationship business and I think the number one lesson that we learned from that that’s taken us a long ways and I think is still one of our core tenets is just people first.

When we were looking at acquiring our first firm, luckily we had already learned some lessons and we were looking for a firm that just had great people in it regardless of really some of the financials that were contained in there. And then the second thing was understanding that when we were coming into that firm, it was all about building relationships, whether you own it or not, it’s about building the relationships you need with those people that you’re working with to ensure that you’re able to have their faith in turning over and discussing even clients with you as an advisor.

Steven:

People first mentality is so important and it sounds like you’re applying that both to the clients you serve as well as the people on your team and who you partner with. Gary, you mentioned that one of the things that you saw as an advantage of having this all in-house was that execution piece. What are some examples of things that you were seeing, because you mentioned that these people have their whole team of professionals, their advisor, their CPA, their priest, but even with that whole team you were seeing that things that weren’t getting executed, so what are some examples of that? 

Gary:

Well, and you’ve probably seen it time and time again, right? I mean you’ve seen the trust that have gone unfunded, you’ve seen whatever it is, great strategies, maybe charitable giving strategies that just go unexecuted time and time again. I could speak a lot to that and so it actually hit me one time I was working with an attorney and they did a really cool thing. They sent me this letter after we’re working together and they said, Hey, we’ve discussed all of these items. Here’s the next step in the process. After you do these three things specifically in changing these registrations, we’d like you to sign the below document and send this letter back to us that we have documentation that you’ve executed and finalized that.

That was just a huge light bulb for me. It just clicked one day and I just went, I get it. That makes all the sense in the world then this is what’s missing as follow through on that. 

Steven:

Yeah, I’m completely with you. I tell people all the time that tax planning isn’t complete until it’s been reported to the IRS and there’s lots of examples of that. There’s legal examples of that that aren’t IRS specific, but you’ve got to get all the way through to the end because if don’t anything, sometimes you’ve created a bigger headache than you have a solution if you only get people partway there, and I think unfortunately there’s still a lot of advisors who see their role as I’m going to give you the ideas and all the best of luck and that just doesn’t cut it. And there’s lots of different ways to try to solve that.

I mean you can partner with a CPA who’s external to you. You can make sure that you mentioned it quarterbacking the relationship, taking responsibility to seeing it through to the end or I’m seeing more and more advisors interested in having CPAs in-house, but I’m seeing mixed results on what that actually looks like in practice. 

Gary:

Oh man, I totally agree. In fact, we’ve kind of gone through an interesting evolution with that. We started with thinking we need these, we need folks in-house that we work with every day, and don’t get me wrong, that’s still valuable every single day. It absolutely is. But when we sort of had somewhat of a shakily proven model, we had the opportunity to take that to a much larger firm in California and go into a JV with another group with that. That was a 75-year-old tax and accounting firm with three offices in the Bay area and they had I think 110, 120 employees and we were able to bring on a longtime friend of mine in the industry that we had worked with forever, and were able to sort of JV and partner on that and then prove out our model on a much bigger level where we didn’t own a tax firm and we didn’t have them, and you either learn a lot or you have success, there’s no failure.

We just learned a lot from that too and continue to iterate and see what adds value to the clients above all, which is the most important aspect of what we’re all trying to do. 

Steven:

Gary, when advisors talk about the idea, especially of acquiring tax firms or trying to get into some kind of formal relationship, I hear the excitement more on the side of, Hey, this is going to be a great source of new clients and maybe the client service piece is ancillary or kind of a side benefit. What’s your actual experience been like? Do you see value more on one side than the other? You’ve seen it all the way around. What does it look like in reality? 

Gary:

I think once things are really operating and you have the trust, you see clients going in both directions. We send a lot of clients that we originate from elsewhere into the tax firm and the client sees benefit of that.

We have quarterly meetings with the CPAs that are handling these cases in a majority of our models where we’re going through what’s updating and what’s new. The reality is of is it takes a lot of relationship building to build that trust because at the end of the day, if you’re coming in, the worst thing you could do is try to become a CPA or EA and do tax returns as well because nobody can do those things, in my opinion. Nobody can do or very few people can do those things extremely well. And so from our aspect, we came in and it really turned into about creating really strong relationships with the other professionals that are there. And I remember the day when we had this kind of figured out, we came in or somewhat of it figured out, we said, Hey, here’s how we’re going to operate this.

Give me your worst problem client, your just worst case scenario you’re thinking about that you don’t want to deal with. Cross out all the names, cross out the addresses, cross out the information, give us all the data, and our team’s going to come back with hopefully a really good solution to these problems or multiple solutions that may fit the client’s personality if you find value in those solutions. Even though we own the firm, I just want to have the chance to portray those to the client and what we could do. And that’s where really we started to have some ability to help clients out of scenarios that weren’t optimal for them, and we were able to improve both sides of the firm for that. 

Steven:

Gary, I love that example because that’s something that listeners can use whether they have an in-house CPA or not. That’s a great approach to just building an effective relationship with another professional, whether it’s a CPA or an attorney, whoever else is in your client’s life who’s providing a different service that’s needed but not your skillset.

Approach it from that mentality of let me demonstrate the value and then we can work together on the execution. This isn’t about proving who’s smarter or who’s got better ideas. It’s people first. It’s what’s going to be the biggest benefit to the client. 

Gary:

Totally. And from us, we say it all the time, I think the CPA is definitely viewed in the client’s eyes as the most recognizable designation, and there’s so much faith that clients put in that. And I think also it’s cool because there’s some pretty cool things we could bring to CPAs that they don’t see every day either, and tax planners that they just don’t get to see every day either. And that to me is a really rewarding part of this, is just learning as much as we can and educating, and now we have a few different teams of people doing that, and we’re up to quite a number of people and we’re starting to hopefully, knock on wood, take that to a national footprint here soon.

Steven:

That’s really exciting. I’ll be really interested to see how that continues to progress. Gary, you’re highlighting something there that I want to key in on. The CPA is definitely the more trusted designation, which right, wrong or otherwise, it just is. That’s the reality of it. But what I find interesting is from the advisor side, it can be really easy to kind of fall into this mentality of, oh, well, CPAs just think they’re better than us. They’re just off doing their thing. They don’t care about planning. And I would really challenge that belief and if I ever say anything on this podcast that makes people think otherwise, here you go. I’m trying to clarify how I really see this because that is definitely a lot of tax professionals’ focus, but it’s because that’s what they’re being asked to do. It’s not because they don’t believe in planning of any kind.

It’s that their client is asking ’em to give ’em a big refund this year. And for a lot of them, they haven’t had an experience like you are describing, where an advisor came to them and showed them the value of this planning at a time where they could do something about it. Because coming in March when we were halfway through the tax return and saying, Hey, Steven, let me tell you about that thing I did last year and why it’s so great. It’s like, no, sorry Garrett, I don’t want to talk to you right now. I probably don’t want to talk to you in six months either. We need to have proactive and front-loaded conversations so we can be peers, we can be collaborators that I’m not feeling like I’m cleaning up a reporting mess. 

Gary:

Totally. And that’s always where it starts, right? You are cleaning up a mess and so then you’re bringing it in and saying, Hey, let’s not have this happen again next year has always been our view of we can’t fix the past, but we can start to plant seeds and grow ideas of what the future can look like, and that’s in an ever-changing environment, I think. But look, I always laugh at it too. It’s like anything, lawyers, doctors, everybody, there are good and bad people in every profession. I think it’s just a matter of finding the people you work really well with and can communicate with on a ground of adding value to clients. That’s the end of the day. 

Steven:

Yeah, you’re absolutely right. There’s going to be those bad apples out there. At the end of the day, most people in a client service role, whether that’s CPA, financial advisor or attorney, they’re looking out for their clients and that’s what they want to be able to do. And so if you’re approaching that relationship, again, whether it’s in-house or not, because I’ve seen plenty of firms that add a new service line and really don’t get any benefit out of it because they don’t build those relationships.

Just because you have the same name on your door doesn’t mean you’ve magically delivered more value. You have to build those relationships, you have to be intentional about it, and you have to make sure that everyone in the room has that focus of how do we deliver value to the client? 

Gary:

Yeah, I think that for us, it just started with education and being there to answer questions when you have and answer those relationships and being there and the good times, the bad times, the hard times, and trying to figure out how to provide better solutions and communicating it more effectively I think is a big part of it. I think as advisors, we’re usually dangerous enough to know enough about the legal aspect, enough about the tax aspect, enough about a few of these, and we don’t have the depth and can’t that those other professionals traditionally have.

And so I think in some ways it puts us in for some people a communicative stage with clients. We’re sort of the interpreters at times, and I’ve always said with ourselves and our team, and my partners great about doing this, Howard, he’s always said, look, if we’re not communicating something clearly, the client’s not understanding it. It’s not their fault, it’s ours. We’re not doing something correctly and we need to come upon this from a different angle.

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Steven:

I love that mentality. I’m a big fan of Jocko Willink and extreme ownership. At the end of the day, everything’s my responsibility. It’s not about finding fault. It’s what am I going to do to make it better. One of the things I wanted to ask you about, Gary, it’s really easy for us to get on a podcast and talk about all the great examples and how fun it is to collaborate, and it can be so much better for the client. Inevitably, there’s going to be times where things go wrong, and that can be where these relationships get tested, whether they’re in-house or not of, okay, we really presented this to our client as we’re this one team and we’re going to do all this great stuff for you. But what happens when inevitably, since none of us are perfect, that mistake gets made. What’s your experience been as far as addressing the mistake without jeopardizing the relationship? 

Gary:

Well, from our perspective really early on, I think you’re absolutely right. They absolutely happen, and you’re only one minute away from the next failure, catastrophe, whatever is going to happen because we’re all human and we all get in those components where even if it’s something that client misunderstood and we’re communicating in different directions, it turns out that we both in our professions get really busy too. I mean, I don’t know if you’re aware of that. Talking to our CPAs around the February to April timeline is kind of like you do it at your own risk. You walk in the room really slowly and with your head down and no, but I think when those come upon it, you actually, it’s so funny you mentioned Jocko Willink is we take the exact lesson from that, which is extreme ownership.

If there’s anything that goes wrong, there’s no pointing the finger, it’s on all of us. And at the end of the day, whether you’re a firm owner, whether you’re an advisor, whether you’re the assistant working on it, we all need to take our ownership so that we can learn from it and understand what goes wrong and then just weed through it. A lot of times when you just go straight at the client and say, Hey, here’s what happened, and there’s been lots of those cases, it’s just coming right at the problem and letting ’em know that we’re taking ownership of it. And then also more importantly, what we’re doing to try to hope and ensure that it doesn’t happen again is usually what clients understand really clearly. So it definitely happens, but it starts with just taking ownership and then working through the problem. 

Steven:

Yeah, we’re kind of going down this rabbit hole of relationship building, but it’s so important to really delivering massive value. But you’re absolutely right, it makes all the difference on whether that mistake adds to the relationship or really ends the relationship. And we all see this in our own lives when somebody comes back to us and is trying to cast blame or avoid responsibility, it just sours you on that person probably permanently. It’s really hard to come back from that. It’s not hard to come back from a mistake if it’s clear they took responsibility for it, and to your point, they’re addressing how it’s going to be different the next time. That’s all we really expect from people is, and I tell advisors this all the time on taxes in general because there’s so many different tax rules that in my experience, clients aren’t looking for you to have all of the answers. Just being committed to finding the answers. And that might be you finding the answer or you finding someone who can.

Gary:

That’s it, and I don’t know goes a long ways. I think I say it like four times a day, not as smart as a lot of our people, but I think that it’s saying, I don’t know, but we’re going to get to the bottom of the solution. We’re going to do our best to bring the best solution that we can to you that fits your personality. I think the focus of that, because you’re right, I mean at the end of the day, there’s just so many things that can happen with complexity, especially when you’re trying to take things to some deeper levels. There’s definitely some things we’ve done in the past that are fairly complex and it requires a lot of coordination. And above all what you were talking, it’s just communication. It’s all communication. 

Steven:

That communication piece can’t get reinforced enough that so much pain and frustration and mistakes can be avoided with clear, consistent communication on these topics. So Gary, in our conversations we’ve had have really appreciated that you don’t have the rose color glasses on as far, even though you, you’ve got tax preparers in-house, it’s not, hey, every advisor needs to do this in every situation. It’s always going to work out perfectly, but it can be certainly a value add if it’s done right. So if there’s advisors listening who have thought about that or in some stage of it, I mean, what are some things you wish you would’ve known 10 years ago or that you would tell the next person who’s thinking about going down this road?

Gary: 

I would say first thinking about your intention of what you’re trying to do. What are you trying to bring to your clients? What are you trying to bring to your firm to do that? I would also say think about your own knowledge, because there are times where we were learning a lot of lessons, I would say, where at the end of the day there’s the, well, I’m a CPA and you’re not.

I’m an EA and you’re not. I do this work and you don’t. And whether you’re an owner or not, having a depth of knowledge in regards to what that looks like and what a daily operation of a tax firm, an accounting firm looks like is so important to me. I mean, you have to understand what that looks like not only from February through April, but afterwards and what those hours look like, what the time constraint is, what clients are thinking about when it comes to that. So I would just say think about the value that you’re adding to that. And the other thing I would say it’s really funny thing that we tend to never do is, I don’t know why I always forget this, and then when I’m in really a conundrum, it goes back to, here’s an idea, ask your client. We always try to guess what our clients want instead of just going to them and going, Hey, what do you think about this?

And so we have a few clients that we bounce ideas off pretty regularly and just say, Hey, what do you think about this? Would this add value to our relationship or not? What is your view on this? And I think those are the starting points. And then just being really aware of what your involvement, roles, roles, expectations are in that firm to make sure that you’re bringing all of your best components forward. And there’s no surprises for you because when the rubber meets the road and you’re sitting there and you have 50 tax returns to do and nobody to do it or a hundred or 200 or a thousand, that’s when reality sets in pretty quickly. 

Gary:

That could be a pretty startling reality. And I’ve talked to advisors who’ve been through that. In fact, we had some at the summit last year talk about that very experience that the first year or two of owning a tax practice under his financial planning practice was some very startling realities for him of, oh, I may not be the professional tax person here, but my name’s on the company and I committed to getting these done. They have to get done. 

Gary:

Totally. It’s a good and bad thing. Okay, so I’ve talked about bad things too much. Probably I should talk about the good things. There’s some positives of it too. When you’re into a tax firm where most people don’t buy a gigantic tax firm as their first firm, they buy a small one. And when you get into those small firms, you realize time is of a constraint and everybody has a hat. Everybody is doing one particular thing. What sometimes those firms don’t have the ability to do is take a step back and look at their operation and say, how can we get more time back to ourselves? How can we get more time back to higher value to the client instead of blocking and tackling? We’re spending time on strategy because the one thing that I saw in evaluating a lot of tax firms was there was no time to step back and say, Hey, how can we improve here and make our lives better?

And as an advisor who maybe doesn’t have to come in and do those things, look at it from that way once again, treating them as the client and saying, how can I make their life better? How can we originate talk to other people in the industry and see what they’re doing to have better balance or better, whatever it is? 

Steven:

With the right mentality and that perspective of how do we treating it maybe like you would a client of taking that step back and saying, what’s going on here? What can be improved? There are certainly a lot of opportunities because no offense to the CPA industry at large, but especially those smaller firms, they tend to be more of jobs than they are of businesses that it’s How many hours can I do? How many returns can I crank out? And that can be where some of the shock comes in is that an advisor comes in and thinks they’re buying a company.

Well, what they’re doing is they’re really just buying a job. And so either they need to have somebody that they’ve hired to fill that job or they’re going to end up filling the job themselves. And so when somebody can come along with that more strategic vision and say, wait, how could we adjust this? There is potential there. 

Gary:

I saw that and my partner did too, in more than one or two tax and accounting firms walking in and seeing a sleeping area in an office. And that’s when I went, okay, here’s reality. That’s intense. So no, I hope nobody has to do that these days so much. But I think that’s absolutely astute of you to say. 

Steven:

So Gary, with people on staff that are tax-focused, have you found that you are able to delegate more of that and you don’t stay in the weeds as much with your tax knowledge, or do you continue to commit and elevate your own tax knowledge so you’re better able to bring them into the conversation?

Gary:

It’s really funny. When we started going to this firm in California, we actually, the individual that was in there, his past was wholesaling. So he was great at relationships and he was dangerous around financial planning. But what was really happening was he was relationship-building in the firm. And then we would get all this content from the client and that would get sent up to the brain trust and we would start to even, or as early on as deriving questions to ask the clients to just get conversation going and understand where they’re coming from. And so where it’s always sort of been is, and we have tremendous people now, is when we have a particularly complex issue, we get a lot of people involved in it. And so we’re all sort of coming from our own angle, our own experiences, our own ways of maybe solving the problem.

And so I love that part because it lets me, to your point, not be in the woods as much, but really dive into intricacy and try to bring eloquent solutions to the scenario that we’re in. And also it allows us to situationally lift our head up and go, I see these other big firms doing this and they have a lot more time on their hands. Maybe we could do that too. So we have actually started with folks that do work for us outside of our country. And so we started that as a really small firm. We have kind of a pilot program going with that right now on some of our accounting work. 

Steven:

There’s so many potential opportunities out there if we can get creative about how we address these issues. 

Gary:

And try ’em, right, and see what works and what. 

Steven:

Yeah. Well, Gary, I certainly appreciate you coming on and sharing so much about your experience and what’s working in your firm. If people are interested in learning more about what you do, how do they find you? 

Gary:

Yeah, just heliumadvisors.com. I think I’m definitely on LinkedIn as well. So we learned so much by just going out and going to some of these industry conferences and meeting people like yourself and trying to learn what works for them and what hasn’t and lessons they’ve learned as much as we can. So it keeps things interesting in an ever-changing world and environment that we’re in. 

Steven:

So it’s definitely a big motivation for doing the podcast is selfishly for myself to learn, but to be able to share those lessons with other people as well. It’s also a big part of why we do the RTS Tax Summit, which will be this fall, September 25th through 27th in Phoenix. Really excited. We’re already well past halfway to selling that event out. Super excited about filling a room with advisors, committed to tax planning and committed to sharing what they’re learning and what’s being successful so we all can elevate together.

Gary:

Yeah, my partner actually is in Phoenix predominantly full-time, so we’ll have to make sure we make that this year. So thanks for letting me know about that. 

Steven:

Absolutely. Excited to have you there. Well, Gary, the last thing we always try to do is make sure that we can take information and turn it into value, which of course is taking action. So as you think about, again, either your journey with incorporating tax planning or just the ways you serve clients, I mean, what are action items that you routinely commit to or that you would recommend to other advisors? 

Gary:

I’m going to say the same things you probably heard at least to begin with, which is always collect tax returns, information, knowledge, knowledge, knowledge please. And get multiple years once we start from there. I think for me, in a world that we’re in, there are so many solutions for clients.

What I am really curious about is trying to dive into the ones that fit the client’s personality the best or fit the client’s family planning the best. And we always are looking at this year and now I think focusing out on multi-years and looking at, you’ve had a few people on your podcast that were, I think really brilliant in saying, which is what we do is it’s not just about this tax year, it’s not just about this planning year, it’s about what you’re trying to get to in the future and how do we look at how these decisions today affect these other decisions of tomorrow and the year after. And you know what, while we’re at it, how about generations from now? What does that look like? And so to me, those are the two main things. Gather information and think longer than today, tomorrow, the next client.

I think just looking at what the future looks like for decisions you make today, because it’s the little things that make a difference long-term. The laser pointer moved right here, just a quarter of an inch is a mile up the mountain in miles from miles away. So I think that has a huge impact. 

Steven:

Gary, such great recommendations. I love that. Yes, I’m a huge advocate of getting every tax return from every client every single year. And when a client’s new, make sure you get multiple years of tax returns. Such great recommendation there. Really appreciate all the insight you’ve shared. For everyone listening, until next time, good luck out there. And remember to tip your server, not the IRS!