Read The Transcript Below:

Steven (00:54):

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 very excited for my guest today to have a conversation around the value of taxes, tax planning, tax preparation as it relates to financial planning and how that can get incorporated. So Bryan Eberle,- welcome to the show. Really excited to have you here to talk about this topic and as we kick things off, just give the audience a little bit of your background with how this conversation came to be and why you had the expertise to be having this conversation.

Bryan (01:27):

Yeah, thank you Steven. I appreciate the invite and pleasure to be here. Looking forward to the conversation. I started my career 20 years ago in professional services, specifically as a wealth advisor. Spent about 10 years building a book of business with one other main partner, built, grew, and ended up selling that business about 10 years ago. So about 10 years into the profession and for whatever reason at that time we were working with a lot of CPA firms throughout the country. I just took a liking to the accounting industry and how it was right for change and improvement and really helping them turn into real businesses rather than just service providers. So at that point, when I sold the business with my other partner, went into CPA consulting, helped CPA firms throughout the country from large to small, so top 20 firms in the country all the way down to your mom and pop solo practitioner, and really helped them with anything they needed help with.  So anything from succession planning to value-based billing, how to productize services, how to price services, what talent do they need on their team and so on. So I spent the next seven years consulting with probably 250 CPA firms throughout the country. And I would say directly to your question, what allows you to speak on some of the things we’re going to speak on here today. It was at the start of that seven-year period. I probably knew very little or nothing about the CPA industry. I was 29, 30, 30 years old at the time. I probably thought I knew something, but for those next seven years, I got to see the good, bad and ugly of 250 plus CPA firms. So very quickly do you start to learn and see the systems, the processes of success, and on the other side of it where the lack of systems, processes, people, technology that are not allowing people or mindset in a lot of cases, allowing firms people get to the next level or transform into the CTA firm of the future, if you will, a professional services firm of the future. So that seven-year window, although I got burnt out, it was a great learning experience. After that, I joined a multiple or a multifamily office where we provided tax law, wealth management, and insurance all under one roof. So I led our CPA team there or the tax team there at the family office and it was a great experience. From there is where I jumped to where I am today at Nepsis Tax. So we don’t hold ourselves out as a family office, but we provide the same level or similar level of services of a multifamily office, which is built all around the collaboration of tax professionals, attorneys and financial advisors all sitting around the table doing what’s best for the client, coming up with proactive strategies for clients based upon what their goals and aspirations are. So that’s been the last 20 years. So I’ve touched a couple different areas of the professional services industry.

Steven (04:42):

Well, I certainly appreciate that background and I’m sure our listeners can hear why I was so excited to have this conversation because so often when taxes and particularly the CPA industry comes up in the financial planning context, it’s largely negative how the conversation goes. It’s no one’s taking on clients. CPA industry is on this downhill trend, it’s all the bad, it’s none of the good. And you highlighted a little bit in there that you certainly saw some of the bad, and we’re not going to pretend there isn’t bad out there like any industry, but really what I want to talk about is the phenomenal opportunity. This is to not just provide quality service to clients, but for advisors who are willing to embrace being part of the solution and not just sit back and complain about what’s out there. There really is this whole spectrum of potential opportunities to, like you said, have multiple professionals sit at the same table because the one end of the spectrum is you’re a financial advisor, you’re doing financial planning that has a tax impact and you’re kind of just wishing your clients all the best and they’re going to H&R block or the local CPA firm, they’re probably are getting rather terrible service or they’re getting just the bare minimum. Alternatively, I’m starting to see more and more people who are proactively trying to change how this model works. So there’s what we’re doing here at retirement tax services. We partner with financial advisors so that we can help them with the tax preparation, the tax planning in conjunction with what they’re doing. Our focus is really on helping people who are either preparing for or into retirement. They tend to not be at a level where they need a family office approach, which is more on the end that you’re at, but there are more and more resources out there like this. So I would say upstream from there like you’re talking about is people like what you’re doing at Nepsis Tax where you literally are giving advisors the opportunity to participate in what feels like a family office environment. So talk more about what it is that you see as the value proposition that you offer and how you landed on this particular set of services as opposed to, I mean, you could just be the H&R block of the world turning out 1040s. How do you decide where that service offering ends?

Bryan (06:47):

Yeah, and just to clarify one point, Steven, which you referenced. So one of the reasons we don’t call ourself a multifamily office or a family office is because we want to bring that family office experience down to the lower level of call your middle-class millionaire. So we definitely work with families that are 200 million, 300 million billion, billionaire families, but we still have a lot of clients that are worth $5 million, $3 million, whatever it may be. Maybe they just need some guidance or help around their state estate tax or passing on their assets to their family or transferring their business from generation one to generation two. So there, there’s all these types of needs where it requires multiple professionals in our view, preferably under one roof or similar to maybe what I’m hearing you guys do more of a relationship than just your random advisor working with a random CPA firm. And really where we spotted the opportunity early on is you have an end-user client, right, who they would go to their financial advisor ask a question and they’d get an answer from their advisor looking through their lens as a financial advisor, but then they might go ask their banker or their CPA or their attorney the same exact question and get a different answer because that professional’s looking through their lens of being an accountant or a tax professional or an attorney, whatever it may be, and it’s not necessarily the wrong answer, but what we would see a lot of the times is the client just doesn’t know what to do, right? They’re almost overwhelmed with information across the different disciplines. So that’s why we felt it was extremely important to get all those professionals at the table collaborating, looking through all those different lenses to come up with a solution that is digestible for the client and understandable across the multiple disciplines.

(08:43):

So that led us to the service model of having the multiple disciplines and specifically to your question around, well, why not tax prep and why? Some of what we’re talking about here is ultimately as professionals, we feel our greatest value is helping, number one, making an impact on individual’s life and helping them gain clarity and getting to their ultimate destination. Whether that’s selling the business or passing on assets or giving to charity, whatever mitigating, tax, whatever it is, our goal is to provide that impact through helping them gain ultimate clarity. So with that said, that’s in our view where the value is, it’s not in the product or hey, we got to do this return as part of helping us get to that goal. That’s just more of the expect item than the value added item. As you know, you look at where technology and machine learning, artificial intelligence is going, we don’t don’t want to be in the business of competing to do a tax return. We want to be in the business of leveraging all that technology and leveraging the systems and the availability for process improvement to allow us to spend more of our time talking to clients about adding that value, helping them gain clarity, helping them achieve their goals. So that’s why we’ve decided to go the path of more of the proactive forward-looking planning and advisory services, although we still will produce tax returns and we’ll do things like bookkeeping and we’ll do some of the commoditized pieces of the model. We chose to focus on value added services for the clients.

Steven (10:29):

Bryan, there’s so many great things you said in there. I want to draw out a couple that I’m kind of taking notes on as I go. I really like that distinction you made. The way I heard it at least is it’s not that clients are going to a different professional and necessarily getting a wrong answer, but they’re getting a different answer for a different context from a different professional who has a different focus, which takes me to something else that you said that really wants to reinforce to everyone is that emphasis on starting with the goal, with starting what the impact is and helping get clarity around what the client is trying to accomplish is so much more important than any individual product or service that a person can provide. And that’s how you start to get this collaboration to be more effective because that’s how we take it from a random financial advisor working with a random CPA to a truly collaborative relationship regardless of this is someone within the same company, this is a third party vendor that you’ve got partnered with. What makes the difference on the client experience is having multiple professionals who see the same desired outcome for the clients and then are working towards providing that clarity on what the best path to get there is. Because I’ve worked with financial advisors who have CPAs on staff under the same name, under the same roof, but they’re basically just running two different businesses, and it may as well be a random financial advisor and a random CPA, which was why I liked what you talked about there at the end of being in the business of leveraging technology to provide that great outcome that if all you’re focused on is grinding out the transactional work, to your point, I mean AI is coming for the repetitive simple things that take up a lot of time right now, and if that’s what you’re focused on, you’re in for a lot of pain. But if your mindset is I’m trying to leverage the tools available to me to provide the best client experience, the best client outcome possible, it’s nothing but potential here.

Bryan (12:17):

Yeah, no, well said. Couldn’t agree more.

Steven (12:20):

So Bryan, talk a little more specifically about some of the successes you’re seeing with clients. Advisors always love to hear what other people are doing. So you talked really broadly about, hey, obviously you want to understand for a specific client what their goal is, what the impact you’re trying to have is, but what are some success stories you can share?

Commercial (12:35):

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Bryan (12:57):

So a lot of our planning starts with obviously based on the previous conversation, identifying what the client’s goals are. So we always look at where they’re at today and then ultimately try to paint a picture pretty quickly within a meeting or two of where they want to get to and where they want to get to from our view is just a lot of probing questions. What do you want it to look like at some point in the future? What do you want to do with your assets? What do you want your legacy to be? And again, it doesn’t have to be at the 50 million mark, a hundred million mark client, the client worth a few million bucks, still might have the same aspirations or want to give to a local charity or help their kids build a business, whatever it may be. But without that clarity, without having that picture or that destination of where we need to get to, it’s almost impossible to get there, right? It’s like getting behind the wheel of the car and just driving around seamlessly without a destination of where you need to get to. So once we have that, we go through a very specific planning process, tax planning process of really looking at all the different revenue streams, looking at opportunities for multiple entity planning. So is there an opportunity to create holding companies, family management companies, hiring children, all of those things that maybe most professionals are aware of. But as you know in the industry, typically on the tax side, we’re going from season to season, being busy, being busy. So although in the middle of tax season you might have an idea of, Hey, we should do this or we should do that, you get busy being busy, like I said, and you don’t have the availability or the time to do the proper planning. The majority of our planning also ties in estate planning. And when I say estate planning, it’s not just estate tax planning where the thresholds are high right now at the federal level, it’s just your basic starch, typically with your basic review of your wills, trusts, powers of attorneys and so on. But we see that, Steven as a very natural connection to the wealth management side of the business. So we have the tax planning and everything we do as an accountant or CPA firm as it relates to some pretty new tax planning we can do. And then on the wealth management side, we have our financial advisors that do what they do as it relates to financial planning and Roth conversions. And there may be some overlap to the tax side, but we really see the estate planning as the bridge between tax and financial planning because estate planning touches everything. You can’t do proper tax planning without estate planning, and you can’t do proper financial planning without the estate planning piece of it. So we recently brought on a tax attorney, estate planning attorney to build out a team in that area to help us further bring together our tax side with our wealth management financial planning side, because I’m talking about a lot of good things here, but I would be dishonest if I were to say we have it all figured out in terms of our tax team to collaborate with our financial planning side. But that’s one of the keys to success right there, I believe is the estate planning piece because it does pull it all together in our view.

Steven (16:18):

That’s a good reminder there, and it can be really easy. I’m a tax professional, that’s why I spend all my time on. I have the benefit of working alongside financial advisors who are doing the wealth management side. I have the benefit of working alongside state planners at times, but it can be easy to get lost in our own little world. And we need those reminders of, hey, this has to be a multi-pronged approach if the client’s going to have a good outcome. Because even for people, I mean you pointed it out, the estate tax exemption levels are really high right now, and even if they stay at those levels, that doesn’t mean we just get to ignore estate planning because the estate planning conversation really helps bring to light what are our legacy plans? Well, because this isn’t just about tax minimization over our lifetime, it’s the lifetime of our wealth. And so as our team works alongside financial advisors to serve taxpayers, that’s one of those things that we’re mindful of that. It’s not just someone comes to me with a tax question and I have my immediate answer of, well, every time, it’s got to be every time it’s got to be a Roth conversion every time. It’s got to be a donor advice. Like, no, that’s not how it works if we’re not considering these other pieces. Back to your comment earlier, it might not technically be the wrong answer, but it certainly wasn’t the best answer unless we’re having that collaborative conversation.

Bryan (17:32):

Yeah, yeah, no, I couldn’t agree more. I think it’s very important and meaningful even when you’re, to your point, when you’re making recommendations to clients, not just talking about the recommendations that you’re having them move forward with, but what are the other 5, 10, 15 things that the team explored and why they’re not a good fit or why you don’t think they’re a good fit. So I think that helps stress test, okay, when you are that transparent with the client and with the team of professionals, it allows you to stress test a little bit, okay, are we doing this for the right reasons to get help the client gets to and reach their goals, or is it more of a product-driven solution because it helps maybe the advisor as well in terms of what they’re incentivized to do .

Steven (18:16):

And I think this is an area that’s becoming just more and more of almost a requirement. So I mean, RTS started a little over three years ago, so that’s three years of working alongside financial advisors to help do tax preparation and tax planning. We’ve learned a lot over that time, but when we started it, it was more with this idea that, hey, the cutting edge advisors really the advisors do the most for the clients are going to be interested in this and it’s going to be this nice add-on service. What we’re finding is I have more conversations like the one we’re having today is that the industry is shifting more and more towards this is just the expectation. And I think some of it is the fact that it’s so hard for taxpayers to find good tax help. They are turning to their financial advisors more. They’re turning to other professionals in their life to say, Hey, I don’t know if this is really your area of expertise or not, but here are my questions. And interestingly, I’m getting more of those questions from consumers directly as well. In fact, before we record this podcast, I was meeting with a taxpayer who thankfully very proactive and I have good relationship with his advisor. He was meeting with me before he met with his advisor, but he sent the whole list of what he thought were tax questions. Maybe half of them were tax questions. The other half were actually financial planning questions that were masquerading as tax questions. And if this taxpayer didn’t have someone on his team who was willing to proactively talk to the other person on his team, most of those questions probably would’ve just gone unanswered or wouldn’t have had to good answers. And so I’m seeing more and more of this expectation from taxpayers. I’m seeing more and more of it come up both on the advisor side and the CPA side that is just pushing to really the necessity of having that collaboration.

Bryan (19:53):

Yeah, I couldn’t agree more. I mean, we see it every day. Just to your point there, Steven, where it might be the client or financial advisor mentioning to the client, have you looked at any tax planning, proactive tax planning? What we see the misperception of clients is they assume and think that their CPA is already doing that plan, right? No, they would’ve came if there were other opportunities or they would’ve told me about that. I’ve used the CPA for the last 15 years, 20 years, 25 years. So I think there’s a misconception from, for the most part, I think the end-user client is becoming a lot more educated, like you’re saying. But even leading up to the last few years, there’s a huge misconception that all CPAs are doing and tax advisors are doing that proactive planning when really they’re not, right. They’re engaged to do the compliance report on the compliance stay within the regulations, but in most cases it’s out of a scope for them to go ahead and do some of the planning. And like we talked about earlier, just with the busyness of the various seasons and the tax profession, it’s hard for them to proactively do that planning. But yeah, we see that misconception on a daily basis, just the client assuming that the planning is getting done and that there’s nothing more that they can do because they haven’t heard from their CPA that they can do it.

Steven (21:19):

Bryan, I want to circle back to a comment you made before because part of the reason I do this podcast is because I get to learn a ton from it. So you mentioned that one of the things that you do with clients at times is helping with identifying opportunities for multiple entities. And with the clients that I more typically work with, that’s not, I mean, we work with small business owners, there are certainly entities involved. I get involved with helping with entity like entity determination of what type of entities should have. But I would love for you to speak a little bit more just for people listening of what kind of things should they be on the lookout for? Not that they need to become the expert themselves in creating family management companies or things like that, but what are some of those indications that you look for to say, Hey, there’s a bigger conversation we need to have around here about potentially creating entities.

Bryan (22:01):

And I think I threw out entities just as one piece. Oh, sure. Yeah. You guys, I’m sure when we look at a fact pattern or we look at a client that comes through the door, there’s probably 70 to a hundred different individual strategies that we’re stress testing and looking at. So really the few characteristics that we see of folks when they should be asking questions or looking for professional help is, number one, if they’re in the highest income tax brackets and they are looking for ways to proactively mitigate tax, another reason would be they’re charitably inclined. So is there a way that they can better give to charity today or at some point in the future? A lot of the planning that we do is around charitable planning, which obviously provides, I shouldn’t say obviously, but as provides a lot of opportunities for tax mitigation both now and in the future. Doesn’t necessarily mean you need to give all your money to charity, today, sale of an appreciated asset, whether that’s a business stock, something that’s going to create a spike in taxable income, and then any form of business succession would be another area where you can plan around. So really, Steven, I mean, we advise people to proactively ask questions, be curious, but if there’s something going on in life that’s changing, or again around some of those key areas, there’s going to be a lot of opportunities for planning. We utilize, we do a lot of planning around trust into your original question around entities. So how should your assets be owned? Should we be considering in addition to just tax planning, but should we be considering protection? If you own specific assets, should it be owned by an LLC? Should it be owned by a trust? How should those entities be owned? Should they be owned individually? Should it be owned by a trust? We always get the question even from our internal team of professionals, Hey, my client’s buying a second home, it’s going to be a rental property or an investment property. Should they own it individually? Should an LLC own it? Should a trust own it? And they usually end the question with, we probably don’t have enough information, but I figured they ask, right? So we are always careful to say, we have no idea. We need to know where that ties into the overall plan of where they want to get to. And it’s hard to say in that case, should it be owned individually, that asset or via some form of entity structure or trust or whatever it may be.

Steven (24:42):

That’s certainly a great, great recommendation in there to make sure that you’re being curious at all levels of this.That’s such a great reminder. Bryan, on the topic of being curious, as people are listening to this and thinking, Hey, I want to learn more about what Bryan and his team are doing, how can people find out more about what you and Nepsis are doing? 

Bryan (24:43)

Yeah, you can go to our website, nepsisinc.com, N-E-P-S-I-S-I-N -C.com. You can see an overview of our services. We also have a podcast, which you can find on there. We put out all kinds of thought leadership type materials on planning strategies, services, et cetera. And like I said, the podcast, I think we have over a hundred episodes to date. So plenty of material to find on nepsisinc.com.

Steven(25:19):

Awesome. That’s very exciting. Well, Bryan, I really appreciate your time coming on and having this conversation with me. I love learning from other people and seeing the other things, and other great things going on in the industry.

Bryan: (25:29):

Yeah, no, it was great to have us  Steve, and I look forward to continuing some of our conversations.

Steven (25:33):

Yeah, absolutely. And for everyone listening, if you are looking to expand how you are partnering on tax planning, make sure that you’re taking that curiosity mindset and you’re going out and learning more, go out to retirementtaxservices.com. Send us a message for the 2024 tax filing season at the beginning of 2025. We are still taking on a few more premiere members, so reach out, we’d love to talk to you and share how we’re partnering with advisors. And until next time, good luck out there. And remember to tip your server, not the IRS.