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Steven Jarvis, CPA (00:52.61)
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 this week we’re gonna have a lot of fun, touch on several different topics. But my guest not only is a financial advisor who has recently jumped into this wonderful world of tax preparation, but has a lot of other experience really helping on the behavioral side of finance. So these are all things I love talking about. So join me this week is Jonathan Steele. Jonathan, welcome to the show.

Jonathan Steele (01:19.822)
Thanks for having me. Very excited about the conversation.

Steven Jarvis, CPA (01:22.242)
Jonathan, before we dive in, give just a kind of high-level background about who you are and what you do. Just give the audience kind of an idea of, hey, why should they pay attention to you?

Jonathan Steele (01:30.008)
Yeah, so I started professionally in the financial services community in nineteen ninety seven. I came from a cooking background, which is of course the traditional path. Yep. clearly not. I I got a degree in business and economics in nineteen ninety seven. I was cooking all through high school and college, and my brother had just moved to San Francisco at that time. And in the late nineties, to make it as a cook, you were either gonna be working in New York City or San Francisco. I moved from Philadelphia, which is now a very good restaurant city. But back then it was it was okay. But to make it, you’re moving to either New York and San Francisco. My brother had just moved here and so I moved to San Francisco thinking that that was the career I wanted to pursue as a cook. And shortly after I realized that cooking through high school and college was a really good way to pay the bills. But as a career when your social life starts at two in the morning… That’s what you’re kind of looking at for the rest of your life. I just felt like there was a different path I wanted to take. And my brother at the time had just started working at Bear Stearns. And we know Bear Stearns. We can give him financial crisis. Yes, I was there during that time. But he said, Hey, I can get you an interview here if you wanna consider the finance track. And so I got an interview. I started cold calling, making five hundred dollars a day.
And I did that for many years. I did it for a period of time with for some other people and then joined my brother shortly after and we became partners essentially at the end of nineteen ninety seven. Started building our financial planning practice one client at a time. And so if you remember back then, for those who are listening, this was during the dot com era where if you put dot com next to your company name, you were all of a sudden valued at a billion dollars, which was a very high valuation back then. Yeah. And types of clients we were focusing on back then with which I think is relevant to this conversation were not the C suite types of clients. We felt like those clients were very, very well served with many of our cohorts at the bank. But there was this subset of potential clients that were nobody was talking to and they were going to be millionaires after the companies go public. And so we started calling on engineer NVP level clients or prospective clients of private companies that were soon to go public. And that’s essentially how we started our practice.

Steven Jarvis, CPA (03:38.574)
I know that a really important part of this to you has been the the behavioral finance piece of it. Like we we can get into like all of the the quantitative stuff, which I’m a taxard myself. Like there’s definitely room and value for the more hard skills that go along with this. But even though I talk about tax all the time, I try to remind people as often as I can that like, hey, if there’s not a goal, if there’s not like a a bigger purpose behind the tax strategies we’re doing, they usually fall apart. When clients are the most committed to falling through on a strategy is when you actually tie it back to something that’s more important to them. So talk to me a little bit more about where this emphasis for you on the behavioral side of things comes from and then how that fits into your practice at large.

Jonathan Steele (04:17.321)
Yeah, thank you for that because we’re actually very interestingly in moments like this now, very similar to the dot-com era. Now that ended poorly, and I’m not suggesting that that’s any prediction that I have relative to what’s going to take place with current private companies, et cetera. But I was actually just talking to my team about this because we had a little finance 101 session and we talked about anthropic and open AI and kind of how one could consider planning for what is otherwise not necessarily quote unquote real money. It could be real money when they go public and frees up and you could sell. But how does one develop a financial plan for a prospective client who who has private stock and or is going to invest over time and and matching their goals and objectives and the way in which they want to grow their lives and grow into their money. And I think back to the types of things when I was young and the types of finance moments in my life that were related to finance that affected me to this day. And one of those things, and I’ll t I promise I’ll tie it back to advising clients. One of those one of those things was in eighth grade, my mom brought me to Bamburgers. And Bamburgers was basically a Macy, I think they were actually acquired by Macy’s, but the Bamburgers was a was a place where you went to buy your school clothes basically right before you were going to go to school. And and so in the summer before my eighth grade year, my mom brought me shopping to Bamburgers. And this was kind of the first time where I actually cared about what I look like, you know, like I wanted to dress and, you know, people started to like notice each other instead of wearing sweatpants and all that kind of stuff. And so I got my first round of of clothing and my mom paid on a Bamburger’s credit card, went home and wrote a check to pay for the Bamburger’s credit card. And that was a moment to me that really stuck and how I think about money even to this day is that you want to be fiscally responsible for the things that you purchase. Right. And so how does that tie all back into how we advise clients? In the year 2000, April, May of 2000, after a few years of cold calling and building our practice, we were getting in front of a lot of clients who, in, and you’ll appreciate this as a tax person and your listeners as well, a lot of those people exercised and held ISOs.

Jonathan Steele (06:32.564)
And had a big AMT bill, thinking that in the year 2000 they were going to be able to sell their stock in anticipation of an April, April return. And March of 2000, of course, was the year where we had the crash. And many of them, I was talking to my team about this, many of them had to mortgage their homes to basically pay their AMT bill. The things I think about to this day, as much or a little as I’d like to keep an open mind around how I advise clients, there’s a certain part of me that thinks about what could happen and what are the things that I can talk to clients or prospective clients that that consider that potential outcome and to help defend to the best of our ability what could take place. Yeah.

Steven Jarvis, CPA (07:14.062)
We’re we’re gonna get far away from sort from core tax plan and I and I love it here. But the the question that comes to mind as you described that is kind of where where do you draw the line of helping clients plan for uncertainty, but not being driven by fear? Please tell me if I’m wrong, or we just won’t air the episode if I’m getting this completely wrong. But I I can’t imagine you’re advising your clients to prepare as if tomorrow the market’s gonna melt down every single time. Like you you there’s no way that you’re preparing your clients to just assume that everything’s always gonna crash. But like you said, that’s always somewhere in your mind. So where do you draw that balance of preparing for uncertainty, but still moving forward?

Jonathan Steele (07:48.522)
Is there any more important role for a financial advisor other than helping them develop a healthy relationship with the money? Right. To consider potential outcomes, to communicate to a relatively intellectual person that generally understands and is open to the conversation, by the way, there has to be a certain amount of two-way openness with respect to them thinking that, okay, maybe this can take place. But you’re right, you don’t lead with fear. Right. Because this is something that is very important to these people. And so that’s why I said things that affected me early in my life help to guide my advice to a certain extent. But the reality is we’re armed with great tools that can plan for a variety of scenarios. And we use those tools to our advantage. And so when we’re presenting to clients, it’s not like I’m building in the worst case scenario of capital markets expectations and stocks are going to go down and bonds are going to go down and this kind of fear tactic. But what I will say is that it’s I think it’s c unreasonable to not at least consider a not necessarily a dire scenario, but a scenario that is plausible. How does that affect your prospective client or client’s mindset around how you’re gonna address your goals and objectives? And remember, a lot of these people are still developing a relationship with money, and it’s money they don’t necessarily even have yet. And so there is this idea that like we’ve seen a playbook of five hundred client families, we’ve seen a playbook in multiple market cycles. So here’s what we’ve learned throughout our career that we can help communicate of potential outcomes. And by the way, we could still get it totally wrong, right? ‘Cause ’cause w who knows what’s gonna happen.

Steven Jarvis, CPA (09:25.998)
I appreciate you acknowledging that sometimes you listen to people talk it, you’re not entirely sure whether they realize that they don’t know what’s going to happen. They they talk so confidently of here’s clearly the outcome. And I think not really intentionally coming into this conversation, but this last little piece I think really highlights where those of us, whether it’s financial planning, tax planning, professional services of any kind, those of us who don’t see AI as a threat, I think are the ones who lean into this other piece because at least on the tax side. Like I I kind of wish AI would go a little bit faster. Like there’s lots of things in my my day to day that I’d be okay with a computer doing for me. But I don’t worry about getting replaced entirely because I I focus on on the communication side, on the experience side, on the behavior side. Like, those are things that those are human elements that you and I are gonna be able to continue to do for clients.

Jonathan Steele (10:11.576)
Little interesting side story. So my brother who’s my partner in our practice, the the one who I we started essentially our practice at Bear Sterns in nineteen ninety-seven. Today we have our own independent practice we started in twenty fifteen. It’s called One Wealth Advisors. He and I are partners, we’re the founding partners of the company. He has a separate business endeavor that’s a restaurant business. And throughout our entire career in finance and alongside his restaurant touring, being a restaurant tour, he’s always had and this is with some of the… The genius of my brother. He’s always had this idea that those who treat their practice as a hospitality practice is really attending to what clients want. Now, they want really good technical proficiency, they want good delivery of product and service. But really at the end of the day, if you’re treating your clients with a sense of hospitality, then you have not immunized but helped to defend against threats like AI.

Steven Jarvis, CPA (11:09.218)
That’s makes so much sense. I hadn’t drawn that connection like that directly that, hey, just think about this as a hospitality business. But some of the most successful advisors I know, my good friend Micah Shylansky comes to mind. I mean, he’s sent his team to like Ritz Carlton training before, like making like that same connection that you’re talking about of like, like, hey, and and this is before AI was ever even a conversation. This isn’t like in response to current things. This is acknowledging early on that, like, hey, as an advisor, if you want to do something different, if you really want to deliver massive value and make yourself indispensable, distinct from other advisors. It’s all about that experience and leveraging the hospitality industry to learn that. That’s genius.

Jonathan Steele (11:45.858)
Hundred percent. And what I always say is that I prefer, in the those who I hire, this idea of empathy, this idea of those who can try to relate to the client or prospective client that we’re working with. The technical skills are generally teachable, right? But the hospitality part of it is much more difficult. And as a result, as we’re growing and as we’re hiring people, we really want to focus on those who have this sense of hospitality. This sense of working as a team, always doing what we think is in the best interest of our client and always keeping our clients first before anything else. And then if that’s the case, send them to get their CFP, send them to get their CFA. We have two people that just got their EA. We have another person who’s getting their CPA. And so the reality is you can teach these skills, but if you can lead with empathy and you can lead with hospitality, the backfilling of technical proficiency is available.

Steven Jarvis, CPA (12:42.488)
Completely agreed. Okay. So Jonathan, since you mentioned EAs and CPA on your team, let’s kind of make a hard shift here and talk about recent endeavor of adding tax preparation to your firm.

Jonathan Steele (12:52.706)
Well, one coming from the bank, I f I feel like that is an immediate differentiator because banks are not doing tax, right? They’re they’re giving some tax advice. They’re generally talking about estate planning and many of them do a great job. But the reality is the independent community has a real advantage. And the real advantage is when working with clients and or if you’re in a competitive situation against a a bank, you can use this idea of providing tax advice formally.
Not like this kind of like, hey, yeah, we give tax advice, but blah, blah, blah. Like you give tax advice and you could also do tax returns, right? And so I feel that is a competitive advantage competing with banks. Now, in the independent community, I feel it’s table stakes. I feel like if you’re not offering tax, at least tax advice and having working knowledge of the tax industry, AMT, remember what affected me very early on in my career, tax advice. And then also being able to do tax returns, I feel it’s almost table stakes for a firm of our size, which is $1.2 or $1.3 billion. It’s a heavy capital investment. It’s a head count investment, very worthy of an investment, because at the end of the day, we don’t think estate, tax, insurance, and investment and financial planning should be separated. Now, I understand legally why the regulators want it separated. I’m very respectful of that, of course. But clients at the end of the day, they just want to know everything’s cared for. And they want to know that they’re getting the best advice from the best people. And if you could put together the best advice and the best people into one company and take care of all of those functions, then the reality is then you’ve created an incredible firm. Yeah. Absolutely.

Steven Jarvis, CPA (14:33.006)
Absolutely. The one thing I’ll add there, just because I have some insight, the sign of the industry that I’m on is I totally agree with you that it’s becoming table stakes in the independent space to at least be able to talk about taxes. And you’re I’m meeting more and more people who are in your position where they’re exploring whether it’s how do we bring this in-house, how do we do more formal partnerships, they’re like, how do we facilitate the tax preparation to make sure it happens? But it it’s not, it’s going to be a very short curve before larger and larger firms are doing that same thing. And the reason I say that Is because I’m already having conversations because I talk about this so much, I get firms reaching out to me who have hundreds of advisors or thousands of advisors that have tens of billions under management, if not a hundred billion under management. And they are exploring these things too. Now it will take them longer because they have bigger compliance departments, they have more people to try to manage. They are also aware that this is where things need to go, which if I’m in the independent space to me just means okay, I need to move quicker to keep my first mover advantage.

Jonathan Steele (15:28.014)
I agree with the quicker only in the sense that you also have to be mindful of your swim lane, right? And the why I consider basically taxes like the entire pool or it’s the entire ocean in many instances, right? But you’re t you’re talking about a particular swim lane. We don’t intend out of the gate to do complicated tax returns. Yeah. Right. That’s a great point. Complicated is basically like it ranges, right, cross border, right? really depends on the client. And it also depends on the client’s willingness and ability to accept the fact that we’re launching a practice and this is a pilot program, they should have a certain amount of patience in kind of engaging with us. Okay.

Steven Jarvis, CPA (16:07.032)
So Jonathan, how did the first year go? Like talk a little bit about the lead up to it. Like how how did you feel like you were preparing? And then how did that compare to how prepared you actually felt during and like what have you learned coming out the other side?

Jonathan Steele (16:18.36)
Yeah. So I would say leading up to it with a healthy degree of confidence, we felt like we reached out to the market. We we reached out to RAs, we reached out to CPAs, we reached out to partnerships and considered many different avenues and decided to work with an external partner who I’m not going to name on this podcast. But that external partner, you know, at the end of the day, what we realized is this idea of hospitality, this idea of our clients and our our pilot group of clients who did tax, we’re used to having very white glove high communication, respond at a moment’s notice, try to predict what they’re thinking mindset and feeling. And the reality was that the partnership that we developed was ended up being very enclosed, very controlling of the communication. And by the way, there’s a certain amount of ring fencing that should take place with regarding their role with a client versus ours. And so we were respectful of that. But it just ended up being very difficult. And so what we realized is that if we’re going to do this and we’re going to do it the one waff way… Then we need to do it in small incremental chunks, and we need to do it with our own people. Now, this is counter to many of the people that we talk to in the industry, right? And so we’re getting mixed views. Like you want to launch a tax practice, you’re nuts. It’s expensive, it’s not profitable, it’s all bad, like anything taxed, like it’s just basically like taxonomists a curse word to some people. So anytime you talk about tax, it’s just like, God. And and with financial planning and what we’ve built with our financial planning clients is like, it’s good. It’s kumbaya. Let’s understand your goals and objectives. You have this money. And it so really there’s this contrast that we struggled with. And so what we’re trying to do is we’re trying to bring together this idea of this kumbaya financial planning, white-glove ecosystem that we’ve built, and then marry it with the kind of this white-glove tax experience that the client’s gonna have, recognizing that it’s gonna be very expensive, likely unprofitable for many years. But in my opinion, also table stakes with respect to defending our territory in the independent community.

Steven Jarvis, CPA (18:16.396)
This most recent tax filing season for so for the twenty twenty five tax year. Is that where this partnership didn’t turn out the way you wanted, or is that the year before? okay. So you tried this partnership, realized, hey, wait, the level of hospitality, I think that’s that’s a good way to describe it. And you got to kind of see that firsthand, but I I think there’s many people on both sides of the aisle of financial plan, tax planning and say, yeah, that that is a big distinction because sure legacy tax plan tax prep, sign has been…

Jonathan Steele (18:24.696)
First is twenty twenty five, yeah.

Steven Jarvis, CPA (18:44.984)
High volume, low margin, let’s get this stuff done. Whereas like he’s like you said, financial planning has been much more like full relationship, ongoing, very responsive. Okay. But so now you’re at the point where you started hiring these other people. You’re saying, okay, going into twenty twenty six filing season, these are gonna be in-house people.

Jonathan Steele (19:01.964)
Yep. And let’s go back to the reason why we launched this, other than the competitive environment, because I think that’s really important. We’ve been in the business since nineteen ninety-seven and we’ve referred no less than two hundred clients to to CPAs. Right. never asking for anything in return. Yeah. Ever. Other than doing good work for our clients. Yeah. Those those tax people retired, those tax people got acquired, those tax people took on too many clients where they had diminutive service. Basically, their service diminished. So we recognize that our clients who wanted the level of service and connection that they had with us, we were referring to people that maybe initially were giving that kind of service, but otherwise they either went away, they retired, they got acquired, or they just took on too many clients to make it profitable. So that is the main reason why we were we were bringing this in-house. Yeah.

Steven Jarvis, CPA (19:53.048)
That makes a ton of sense because as you describe the different things you hear from other advisors, that all sounds very familiar to me because I talk to so many different advisors, I hear so many different experiences. And the underlying theme is no matter what you feel about this idea of bringing it in-house or partnering, like even the people who are like, ” Don’t ever touch it. Then when you say, Yeah, but what are your clients gonna do about tax prep? They kind of just have to shrug their shoulders. Cause I’ve met financial planning firms who like really want to get into more eccentric service offerings, like we’re gonna do travel planning.

Jonathan Steele (20:21.526)
Yep, that’s the classic one. Cool.

Steven Jarvis, CPA (20:23.628)
Like, like, if you want to do that, great. Like, I really don’t have an opinion on whether that makes sense or not. I just haven’t dealt with it firsthand. But, like, we can have an argument about whether a client really needs that or really cares about it. Like, there’s a whole different value discussion. On taxes, like, if you aren’t going to address it, who is? And I’ve met advisors who acquire tax practices that help them grow. An advisor who got who acquired a tax practice a couple of years ago, I just recently learned that he was like, Nope, I’m done. I’m selling it. I don’t know what he’s gonna do instead. But there there are there are challenges here, but It’s not going away. I’m in kind of a unique position for a CPA in that I spend all my time working with financial advisors, including we do tax prep for a few dozen advisors, five to six hundred tax returns this year. And it’s also a learning curve for us each year. Even though I have this exposure to the financial planning industry, we’re always saying, okay, how do we, how do we take what has to get done on the tax prep side and keep trying to elevate that hospitality? I think that’s a great word for it. How do we keep elevating that hospitality so that everyone’s winning. I don’t think I’ve seen a perfect solution to this yet. I’m always looking for it.

Jonathan Steele (21:26.222)
And we’re searching as well. And that’s the to be completely blunt, we’re not a hundred percent sure. What I will say is that more communication is better than less. Yes. And so tax I’ve felt has been the t the tax prep part’s very transactional. Happens twice a year and then you accumulate information, then it’s basically like rinse repeat every year, right? And so there’s a space between that advisor financially the financial advisory firms and or by the way, the tax firms, I think there’s a real opportunity for tax firms as well to provide tax advice throughout the year, right? And you develop a service function. And my my sense is that more CPA firms are doing this largely because they’re not taking our clients for tax prep anymore. And if they are, they’re charging 10 to 15 grand for that. So like there is a space between this is a gross generalization. Many of them don’t want tax prep anymore. Yeah. They want the tax advice business. And if they’re not getting the tax advice business, they’re flat out not taking the business. And what what we’re trying to do is we’re trying to like work the space between and deliver this idea of hospitality for that space between. I’m not a hundred percent sure it exists in a profitable way. I think it’s gonna be profitable. What I have a high degree of confidence in more than anything else is that our clients are gonna be feel like they’re fulfilled. Yeah. Even if we’re not making money off of it.

Steven Jarvis, CPA (22:45.376)
Yeah, it’s gonna be really interesting to see how this plays out over the next couple of years because I I know a couple of firms who have been have been in this realm for for years and have probably made more progress than than most at integrating tax and financial planning, but they’ve been at it for years and they’ve got whole teams of CPAs. And there’s there’s still this constant kind of back and forth and balancing of like tax prep is has up to this point has been a different business model, a different thought process, a different skill set. How do we keep all kind of learning from each other of okay, what what really creates the best client outcomes? And so that’s why I love having these conversations to hear what other people are doing, where they’re running into challenges, seeing successes. So I mean, we’ll just have to kind of pencil it in for next year to come back to this and say, okay, how did year two go with having people on the team and in-house?

Jonathan Steele (23:28.568)
Love it. Yeah, and I’m looking forward to that. We’re gonna give it our best. We went we took one direction, we’re gonna give it our best to go to another direction. My sense is that the investment we’re making in our people, the investment we’re making in our systems, our clients will feel nurtured along the way.

Steven Jarvis, CPA (23:44.558)
to possibly be a negative to to tell your clients, hey, we’re always looking for ways to deliver more value. Here’s the thing we’re trying now and and let’s see how this goes together. Exactly. So Jonathan, other than everyone marking their calendar for a year from now when you come back on and tell me how it went, like how how can people learn more about what you’re doing or follow along with your journey?

Jonathan Steele (24:02.102)
They can go to our website, onewealth dot net. That’s O N E W E A L T H dot net. You could reach out to us directly and inquire whether it’s for potential client engagement or if you wanna to consider partnerships with us. We’re happy to have the conversation.

Steven Jarvis, CPA (24:18.318)
Appreciate it. Jonathan, I always love it when people are willing to share their expertise and their experience. As you think about maybe more specifically on the tax side, I mean, we we have we have audience members who are brand new to tax plan, who have been doing this for years. Like, what are things that stand out for you, whether that’s habits or systems? Like how how do you keep improving your own tax knowledge and your ability to communicate with clients effectively on this topic?

Jonathan Steele (24:41.57)
Yeah, I mean, obviously engaging in online communities, I think that’s really important. Keeping three to five people close to you who you respect in the tax industry. And generally speaking, people want to help others. I genuin I I believe that. And so as a result, if you keep three to five people close to you, that gives you a large enough sample set where you’re getting a variety of different opinions, whether it’s their tech stack… Whether it’s their idea of hospitality, whether it’s their idea of their P&L and how they manage their their team in terms of building culture, et cetera, but also, you know, engaging in communities, talking with people like yourself or going to different conferences, I think is a really good way.

Steven Jarvis, CPA (25:19.982)
Jonathan, I feel like I need to send you a thank you note for teeing me up that well because as you described, like I’m a huge advocate for what you’re saying. And it’s part of the reason we created our annual summit. And so for anyone listening who hasn’t gotten a ticket yet to the RTS summit that’s at the end of September in Phoenix, go out to retirementtaxservices.com. If you’ve already got those three to five people in your life that Jonathan’s talking about, great. Invite them to you can all learn together. And if and if you’re looking to add those three to five people to your life, this is an event that is attended by advisors who are committed to leveling up, who are willing to share, who are willing to learn together. So September 27th through 30th in Scottsdale, Arizona, just outside of Phoenix, is the 2026 RTS summit. Go to retirementtaxservices.com and get signed up. So, Jonathan, one more time, really appreciate all your time. Completely serious. I will look forward to our next conversation to hear how this continues to go. I think you’re on the right path of this is incredibly valuable and important. And I appreciate you so openly sharing how it’s progressing.

Jonathan Steele (26:14.968)
Thanks, I appreciate your time.

Steven Jarvis, CPA (26:16.29)
To everyone listening, until next time, good luck out there, and remember to tip your server, not the IRS.