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What You'll Learn In Today's Episode
  • Financial planning and tax compliance aren’t mutually exclusive! In fact, each is done best with an understanding of the other.
  • Advisors and CPAs should deal with their regulatory baggage behind the scenes—and then work together. Collaboration makes both jobs easier while benefitting shared clients.
  • Don’t relegate clients to being a go-between with their data. This often leads to garbled communication between COIs (and strained professional relationships).
  • A proactive, ongoing conversation allows advisors and accountants to cover each other’s blind spots. Reach out ahead of your need.

Executive Summary:

Welcome back to the Retirement Tax Services Podcast! Steven’s guest is Matthew Lincoln. A long time Enrolled Agent and tax professional, Matthew has recently gotten his CFP designation. This (and years of experience) have shown him the benefits of collaboration between advisors and accountants.

Strength in Numbers

Matthew Lincoln’s view of the financial industry is less polarized than some. In fact, he views advisors and CPAs as complimentary ends of the same professional field.

First, as a tax accountant, he’s seen life from a tax preparer’s perspective. He knows firsthand what it means to watch clients make questionable decisions over the years.

Sometimes this was their own idea. However, other times, it was suggested by a new advisor. So, he got protective of those clients.

Just as you’d look closely at a tax return handled by a client’s new tax preparer (or should), he raised an eyebrow in those days.

Now, as a CFP, he spends time looking at things from both sides. In other words, he understands that the divide between advisors and accounts is mostly artificial.

Financial planning and tax compliance aren’t mutually exclusive. As a matter of fact, each of these is done best with a basic understanding of the other.

Advisors and accountants both have very specific industry regulations. For example, some financial advisors are told regularly, “We don’t give tax advice.” House rules may have banished any mention of the t-word.

Other compliance departments take a mostly semantic view, specifying that “tax strategy” is okay, but not “tax planning.” It can be an odd game.

Meanwhile, a tax preparer may be warned against anything resembling financial planning. “If you want to do that,” they’re told, “Get certified and form an RIA.”

The average client has no idea what this is like for either professional. To be honest, there’s no real reason why they should.

Instead, Lincoln advocates, advisors and tax preparers should deal with their regulatory baggage behind the scenes—and then work together. This means a win-win for planners, preparers, and clients alike.

Matthew Lincoln: Conceit vs. Collaboration

Regulations shouldn’t become an excuse for either side. Too many tax professionals say “the regulators won’t let me give (any) advice,” when a client just wants to know what a Roth IRA is.

Instead, Matthew Lincoln believes both financial professionals have a duty to work together. He knows a lot about taxes, but he also acknowledges that he’s not the end-all expert. It’s a huge subject.

Similarly, he knows more than some about financial planning, but there are many niches he has little knowledge of. The brightest human financial professional in all of history would have gaps in their mental library, too.

However, ongoing collaboration allows advisors and tax preparers to cover each other’s blind spots. This is why it pays, in multiple senses, to get proactive.

Lincoln sees it as an extension of his basic fiduciary duty. In other words, he wants more value for clients than his expertise in unfamiliar areas would provide.

On their behalf, he seeks the best insight he can retain, as needed. Meanwhile, by utilizing ongoing professional relationships with other COIs, he eliminates potential confusion.

Have you ever had a tax preparer call or email you, asking why you told a shared client something—which turns out to be nonsense that you didn’t?

If your answer’s “Yes,” you can guess why Lincoln advocates a more collaborative service model. Relegating clients to the status of a go-between can end in miscommunication. It’s a fact of life.

Instead, position them as a part of a continuous 3-way conversation. Keep them in the loop, but know your audience and use language that is beneficial to the client. Don’t get lost in your $5 words.

This adds value for every shared client. At the same time, it removes possible headaches.

Your Action Items

  • Get in touch with your clients’ tax preparers (if you aren’t already). Try to build a professional relationship before you need their help.
  • Catch the 2nd part of this episode next week. Steven allows Matthew to turn the tables and ask questions of him.

Steven and guest Matthew Lincoln have many more gems to share in this episode of the Retirement Tax Services Podcast. However, there’s even more to come next week.

Feedback, unusual tax-planning stories, and suggestions for future guests can be sent to

Are you interested in content that provides you with action steps that you can take to deliver massive tax value to your clients? Then you are going to love our powerful training sessions online. Click on the link below to get started on your journey:

Thank you for listening.


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 through tax planning. My guest on the show today is a little bit different from who I usually have on, Matthew Lincoln is here with me. Who’s a long time enrolled agent and recently picked up his CFP designation. He describes himself as planning curious, and is excited to be part of where our industry is headed. And so Matt, to kick things off: Tell me again how, how you look at our combined industry as opposed to two separate industries?

Advisors And Tax Preparers: Two Sides Of The Same Coin [1:20]

Matthew Lincoln:

Yeah, well first, thanks for having me on the show. I really appreciate it for years. You know, we sit down on the tax side of it, you know, I’m an enrolled agent, so I’m working on tax returns for my clients, that’s what I do. But you can’t help but see, as the years go by, the impact of the decisions that the clients make, and a lot of times those clients are without any advice other than, you know, myself or whoever their tax accountant is. And sometimes they’re working with an advisor and when they are working with an advisor, I think it’s only natural to, to ask yourself, you know, okay, are they getting good advice? Like what are they doing? And I think very naturally, you know, if you’re an advisor, you look at a client’s tax return and you see what happens on the tax return, or you should be looking at the tax return and say, you know, is there everything here that should be here?

Are they, you know, taking care of the best opportunities? And so really it’s like two sides of the same coin. You know, if we’re doing a good job preparing taxes, we’re making decisions for last year, going into the current year and thinking about the future. And then, in the financial, you know, advisor, financial planning world, you’re looking at, how do we move into the future? Where do all of these things take us? So I think it’s a very artificial divide to say that it’s two different industries. I think there’s enough knowledge to have two different categories of professionals, but it’s really one industry. And that industry is taking your clients and trying to give them the best advice to get them wherever it is they’re trying to go.


Yeah. I love that description. I, I think you, you put it really well. It is clearly something that you’ve cared about and spent a lot of time thinking about over your career. Because we do try to create this. I, I like how you said artificial divide, where we have financial planning on one side and, and tax compliance on the other side. And, uh, a lot of people look at this as well. Maybe I, maybe I end up with bulls, like maybe I’ll just pick one, but really, it comes back to is your client having their financial needs taken care of? And so using that lens can start to change the conversation of ultimately how do we deliver massive value to our clients?


Part of it’s gotta come back to each industry has like regulations about what they can and they can’t do. And so on the back end, you know, like let’s say I’m a broker dealer, you know, it might be that the broker dealer I work for, they tell me explicitly, “you can’t give tax advice. You can’t talk about tax things.” So now I’ve had to separate that off. And as a tax professional, there is, you know, warning out there, “Hey, if you give too much advice, then you’re a financial advisor. You better go be registered and you better form your RRA and be giving financial advice.” So there’s this regulatory line, which the client doesn’t see or care about. Like they don’t, they don’t care at all what I’m supposed to do. They just want good advice. They just wanna know they’re going in the right direction. And so I think it’s our job to deal with our regulatory right baggage and then come together and figure out how to just, you know, deal with the client’s needs


Yeah. I think you’re exactly right. It should be incumbent on all of us as professionals to, to deal with our regulatory baggage. I like that too often, that gets used as an excuse on both sides. There’s too many tax professionals who will say, oh, well, the regulators won’t allow me to give advice. And in their minds, what they’re thinking is, well, I can’t tell you which securities to pick, which really that’s probably not what your client’s asking for anyways. No, your client’s asking what’s that ROTH thing I heard about, or, you know, which type of account should I fund or does it make a difference on the timing of, of when I sell, uh, a piece of property or, or some stock? So on both sides of the isle we can use regulation as an excuse to not try harder


Well, that’s where I think we as one industry and not two, like I think we have a duty to work together more often because, I know that I know a lot about taxes. I don’t know everything. It’s just too big of an area. I know that I know a lot about financial planning, but there are people that out there that are doing things, especially as, you know, industries, niche down and all that, where I couldn’t possibly be as good at federal retiree benefits as say, somebody else might be, even though I work a lot with federal retirees. And so on the tax side of the house, I know where I can bring value to that but I also know somebody else is probably out there, I’m just guessing, that can deliver a lot of value on that front.

Our office is in Frederick, Maryland, and we work near DC. We’re a big, uh, commuter area. So we have lots of employees that go down the road, work in DC and do all kinds of stuff. So a common client for me is that federal retiree who is now consulting. So they’ve left government service, and now they’re consulting and maybe they’re making 10 or $15,000 a year. Maybe they’re making it 80 a hundred a year. Maybe they’re making 300,000 a year. It depends on what they’re doing. And I feel like in my wheelhouse, I tackle a lot of demons there. We talk about, you know, deferred comp options. We talk about, you know, business structure. We talk about, 105 plans. And I think that are from my tax lens, but I don’t know some of the things that they could be talking about the year before that point, when they’re getting ready to exit government service, you know, I’m already doing their taxes at that point in time, but I’m not an expert on the FERS system. You know, I do know things, but I, I think that they’re, there’s, there’s probably someone out there that would know more, you know, just guessing


Yeah. Just, just guessing if I had to pick a name out of a hat, I’d probably go with Micah Schlansky, but uh, I’ve heard the names. Yeah. Well, one of those guys over at the perfect RIA. Matt, I really appreciate you taking the time to, to describe that because I mean, this is something you clearly spend a lot of time on. You’re really passionate about not just the tax it, but going beyond that, I appreciate that. You’re willing to acknowledge that for all of us, there’s going to be limitations to the amount of knowledge that we can have. And it’s not about becoming an expert in all of it. It’s about being able to identify where those maybe where those limitations are or where those additional opportunities are. And then, and then do something about it instead of saying, “Hey, we’re both tax professionals.” It can get really easy to get focused on this year and next year, because those are the primary areas we’re focused on from a compliance standpoint, but broadening the horizon a little bit to say, “okay, well, what would that look like five or 10 years down the road?” And then you mentioned it as we were getting ready for the show, but I love this idea. I’d love for you to talk more about it, of, of renting an expert or renting an expert’s knowledge.

Renting Expertise And Niche-Specific Knowledge [8:03]


Well, I mean, yeah, and I feel like, let me address that, but I feel like the issue is that, I feel like an expert and more to the point, I want to know all the answers for my clients. But you know, that’s a little bit of ego in there to think that you’re gonna know it all. And at some point you have to check your ego at the door and say, there’s an expert out there that knows more, my client deserves the best in class expert for their situation. So I have an obligation to them, whether it’s an obligation as a fiduciary, you know, as a CFP, whether it’s just a professional obligation to make sure that they get connected to the best possible answers that are out there. So, I think trying to work collaboratively with someone and trying to design a process that each of us, you know, takes our expertise and says, okay, I can walk you up to this line.

Let me loop in, you know, Mr. A here in, in Mr. A or Mrs B or whoever, you know, let’s bring them in so they can deliver their part of the picture and you know, what maybe it takes… And this is where it gets interesting, I think I talk to the client and I have one conversation. And then I hang up the phone, the client is in my office. Then the client becomes the relayer of complex information and they go and they talk to the financial advisor and then they, you know, play a game of telephone with my information. And then the financial advisor probably goes, “what?”, “something in there doesn’t make any sense?” And then, so then they’re confused. And, and then the client calls me back up and says, “well, geez, I told exactly what you said to my financial advisor.


And they said that doesn’t make any sense at all.” You know, there’s no way you can have a Roth step IRA or whatever. I’m like, “that’s not, that’s not at all what we said.” You know? So that’s in the other disservice to the client. Like they shouldn’t be the middleman. They should be a part of the process. I love the idea that they’re sitting in the room and that they’re hearing the conversation, but I don’t know about you. There is not a ton of times in my career where me as an accountant, have been on a phone call with that client’s advisor and the client all simultaneously. You know, now it has absolutely happened. And when it’s happened, it’s always been fantastic. Okay. But if it never gets there, because I don’t, you know, maybe I don’t wanna talk to the financial advisor, maybe the financial advisor, you know, they’re too busy, you know, I’m just tax guy, they don’t wanna talk to me. If we’re not thinking of it as one service point for the client, then I, I think there’s that barrier to engagement there. You know, it kind of prevents us from stepping forward.


Yeah, it definitely can. And I, I think for some of our longtime listeners of the podcast there, they’re probably sitting here thinking, wait, is, is that actually a tax professional? Because this sounds more like this story that advisors tell themselves of, “Hey, I’m the one relaying information to my clients. It doesn’t get related to the tax professional. They don’t wanna talk to me.” And it turns out that this does happen in both directions, that, like you said, that this, this has to be, we gotta, we gotta find a way for this to be a collaboration. And I, I will say that you probably are more of the exception, uh, on the tax professional of your interest and your commitment to the planning piece. But that certainly doesn’t mean you’re the only one out there doing that.


Well, no, and I think the tax profession is going through a Renaissance, which I also think the advising profession is going through, which is to really like the industry needs to step up their game as advisors. In the tax world, we often think of ourselves as just being buried by change or volume or, you know, laws, or, you know, the clock or whatever. And we need to kind of find a way to engage with our clients, that we can put all that aside. Because our clients don’t care about that. They just want, you know, to know their taxes are being done well and properly in, in their best interest. Uh, on the financial side, you know, the definition of a financial advisor is what I mean, there is no definition of a financial advisor, you know, so, you know, if I’m thinking of, you know, uh, a tip to the listener advisor of your podcast, you know, a question, you know, that they should be thinking is like that, that tax professional, that might be on the other side of this relationship, where are they coming from?

How do I get that person, that advisor to be on my team? And I think, I think I wanna give a couple words of wisdom here. And the first thing that I would say is, I think tax accounts, you know, I’m an enrolled agent, you know, but you know, CPAs that are tax specialists and all that. I think we’re kinda like golden retrievers. You know, what we really want is just to be, you know, respected and loved, you know? And so if an advisor calls me and say, “Hey, I see you’ve been working with my client, you know, Jim and Nancy. And, uh, I really appreciate that. And I see what’s going on with your taxes. I would benefit from your advice. Let me ask you a question.” Well, all of a sudden you just came at me like an equal or like an expert, and you’re gonna get something at it.

Like the puppy dog in me, you know, wants to do anything I can to keep that rolling. And so if you’re a financial advisor and you haven’t reached out to speak to the person that’s doing your client’s taxes, like I know it’s at the end of the podcast, but that’s gotta be your first action item. You know, you have to reach out, you know, you have to introduce yourself and, and say hi. Number one, you’re probably gonna smell out a little bit of like how they are, you know, or maybe you’re gonna find out that it’s a great accountant and they don’t really have good communication skills. Okay. Well, this is a good professional to have in your corner, but you know, that’s something you’re gonna have to deal with as you work with a client over time, you know. Or maybe you’re gonna find out that, you know, I know a lot of tax accountants that I think are really, really great.

And if you give me the opportunity to step up and provide input, I’m on it. I can’t wait for that opportunity because I remember hearing something many years ago that even when you donate to charity, you don’t do it for anybody else’s benefit. You always do it for your own benefit, cuz it feels good to you when you donate to charity. And that’s how I feel about professional service, you know? Yes. You know, I charge and I wanna make money, but I wanna feel good about me. And that’s why I like doing a great job for my clients. And I think for financial advisors, it’s gotta be the same conversation at least, you know, the good real financial advisors out there. Is it about having a successful business and taking care of your family? It’s all of those things, but just the satisfaction of knowing you’re taking care of the clients, a big deal.

And so, you know, we need to get over our, uh, silos and you know, we need a call and that is on my side of the door too. I’ve spent more of the last year calling my clients financial advisors and saying, Hey, I just wanted to introduce myself on the account. And I’m working on whatever, you know, as you’re working on the financial planning process, if you have something coming up, maybe you should reach out to me, but then you get to a little bit of the next barrier. And this is a place where I think we have ill will between the two halves of the profession: and that’s getting paid.


Matt, before you dive into that, let, let’s just provide one clarification here because this is gonna air mid to late January. And I am 100% for advisors proactively communicating with tax professionals. But, let’s be really clear practically, how does this work? Because there, there are some timing things we wanna be considerate of. Right? So yeah in your shoes, when ideally would advisors be reaching out to you to say, “Hey Matt, we serve a similar or, or we serve the same client. We’d love to have this conversation.”


So I mean, there’s obvious restrictions around tax season because there’s gonna be a limit to what you can get out of the accountant during tax season. But there’s not a full blanket restriction in tax season because listen, there’s a lot of actions that can take place between January 1st and April 15th, or maybe as late as October 15th, depending on circumstances that maybe need to be addressed. And if you try to be considerate of the tax account and wait until after tax season, maybe we’re gonna miss that opportunity for doing a Roth contribution or a backdoor Roth contribution, or setting up that Sep IRA. Or, you know, if you’re talking with a business client and we wanna change their deferred comp arrangement, like how far into the year are you gonna go with a simple IRA running when there’s a time period, it takes to flip that over. So if I’m a financial advisor, I’m gonna tentatively reach out at any point in the year, but I’m gonna have some text in my email or my voicemail or whatever that says, listen, I know you’re really busy. Yeah. I just wanna know if there’s something that I can do to help you during this period of time or that the client needs to start acting on. Please feel free to reach out. I’m a resource for the client.


So in mid to late January, this isn’t, “Hey, Matt, I’d love to take you out to lunch. Let me buy a drink. I’m in Florida. Let’s go to the golf course.” Oh no. Uh, it, yeah, let’s so it’s, it’s not, let’s not reach out. It’s, let’s be sensitive about what time of the year it is and make sure we’re being really intentional that if this is during tax season, you’re reaching out to one of your clients, tax professionals be respectful, be mindful, acknowledge, “Hey, this is a really busy time of year for you. Here are three things I did with, with Bob and Sue last year that wanted to make sure you were aware of as you go to prepare their tax returns”


Yeah, no, I think that’s a really good approach. And then if you wanna have a deeper follow up for May or June, you know, I wouldn’t even do it in the last two weeks of April, I’d let everyone, you know, go have a drink or something after tax season. Yeah.  but you know, May or June then, you know, have that deeper conversation. And there’s been a lot of good content on, on your show and over on the Perfect RIA about how to approach accountants. So I don’t wanna revisit that, but just, you know, you’re looking for fellow expert to serve your client and you’re not looking for the reciprocity of that, but it will happen if everything’s a good arrangement.

Addressing Friction Over Payment So That The Client Wins [17:45]


Definitely. So perfect. Well, Matt, I appreciate it. Okay. Let’s let’s circle back to this, this question of, okay how does everyone get paid?


Yeah, so that’s, that’s a tough one. So I’ll share a little bit of a story as a way of kicking this off. So I, I work with several financial advisors that I respect. I really, really do. And some of them are independent RAs and some are broker dealers. And I had one client where I was doing the tax return and I said, Hey, you know, it looks like maybe this would be a great time to do a Roth conversion. Why don’t you go talk to your financial expert on this Roth conversion, you know, and, and, and look at the numbers. So I said, great, I’ll do that. So they went over to the financial advisor, they said, “Hey, my tax accountant said that I should talk to you about a Roth conversion. And the advisor said, you know what? That’s a great idea. I think you should talk to your tax accountants about the Roth conversion. I can’t give you any tax advice, but I can see, like, it feels like this is the right time to be having that conversation. So then the client comes back to me, “Hey, the advisor said you are right, but that you should take a look at doing that.” I’m like, great, well, let’s sit down, let’s do a consult, let’s work up some numbers. You know, this is how I charge for that. And they were like, whoa, whoa, whoa, pump the brakes. Like I pay you to do my taxes. I pay the advisor to do the advising. Like, they’re, shouldn’t be another fee along this way. Like somehow I’m paying two professionals. This should be covered, but it just wasn’t, that’s not how it worked. And at the end of the day, and I, I think I have to take responsibility for not doing a good job educating the client.

They didn’t move forward with any type of projections or anything like that, just despite me and the financial advisor, both recommending that they review it, but there was gonna be a cost. Now, in my mind, I’m immediately jumping to like this, this perfect firm, you know, or this perfect arrangement where the two sides of the house are on the same team and compensation is not something the client has to solve. It’s something that the two advisors have to solve. So if the advisor built into their plan a fee, because let’s face it, the advisor has more fee room. Normally, you know, you’re working with a, a million dollar client, you know, what’s your, what’s your fee? You know, 1% you’re gonna be $10,000, you know, $15,000 depending, you know, a 2 million client in a 2030. So you’ve got, depending on, you know, too, it’s not a small client.

It’s, you know, somewhere there you’ve got a 10 to $30,000 fee and the tax accountants getting paid, you know, $600 or $700, or maybe a thousand dollars, you know, maybe if they got a business a little bit more, there’s a limit to the tax advisor, like just giving up more for free, you know, and maybe there shouldn’t be, you know, and we’re looking at finding ways to, to roll out more advice to our clients and, and letting them know how they could pay for that. But there’s still this historical… Like I pay the tax accountant to do the taxes, but I pay my advisor to do a bunch. So what if part of the advisor’s budget was the tax advice was the consult, you know, and, and you, you know, I could see an advisor coming to a client and saying, Hey, or coming to a tax preparer, “Hey, I’d like you to be involved in the tax planning process. Could you give us a consult at the end of the year”, you know, maybe work out a fee, you know, whatever the number is, you know, I’m gonna make up when say $500 to review the tax plan, to sit in on the call with the client to provide some information like this is what we’re looking for. And now as a tax accountant, I’m back to being a golden retriever. Like someone just threw me a stick. Like this is so exciting. I wanna go get the stick. You know, I don’t have to fight over how I’m gonna get paid with my clients, you know? And I, I don’t wanna throw my clients under the bus, I have wonderful clients. And there’s not an issue about that, but more than occasionally there is. And so it’s not, it’s not the client’s problem. I think as a tax advisor, I have to do a better job solving that problem. As financial advisors, I think there’s maybe a better solution to that problem.


Matt, that’s such a great description of how this works so often. Cause we talk about all the time that for advisors, a great approach to working with tax professionals is Hey, offer to pay for an hour of their time, but you’re doing such a good, good job of explaining why that is the case. Cuz there might be some advisors who, who listen to me say that and say, “well, tax preparers just charge more for their time and maybe that’s true. And you’re, you’re even acknowledging that there’s some responsibility on you, but we’re dealing with, uh, industry that’s and over several decades. And unfortunately is very regimented in how it currently operates. And there are a handful of people out there like you who are trying to push the industry in a better direction, but in general, you’ve got a tax professional, who’s charging 500 to 1000 bucks for a return to get the return done. There’s no room in there for ongoing planning. And it’s so ironic as, as you throw out the dollar amounts that a lot of times clients are paying to their, their financial advisor. And I mean, they can see the fee they pay, but it’s usually coming out of an account. They’re not writing a check for it. And so there’s this paying to the client of paying you an extra $500, even though they’re paying the advisor tens of thousands of dollars potentially. And so yeah, I like your approach of how do we work this out between the professionals so the client is the one who wins.


And I think if you look at the tax industry and you look at the, what I consider to be a lot of very good hardworking professionals out there. Each professional, myself included, is trying to make a decision about how do we wanna move forward with our clients? Like, do we want to, when we think advisors are not doing the job, do we wanna replace them in the relationship or do we wanna work with them in the relationship? And I think there is this feeling in the beginning that we could replace them because if you’re a tax accountant and you don’t see the value being delivered by the advisor, you see just rudimentary things. And remember as an accountant, I’ve seen a ton of bad advice and some good advice. As financial advisors, you’ve probably seen a lot of bad tax returns and some good tax returns.

And so I think we’re tainted by the mass produced low end side of our industry that is not doing the kind of work that we wanna do. But for me as I go through and I think about this, you know, I find it hard to, you know, how can I replace an advisor that is really delivering a lot of unique value from their years of experience? You know, that’s not really something I can do. So what’s the better answer for the client is to work with the advisor and to be a team. Now we’re like multiplying value instead of trying to subtract and add value, you know, and it’s the multiplication I think is much more exciting for this industry.


Yeah. As we were getting ready to hit record for this show, you had brought up some other areas where it just, it makes more sense for tax professionals and advisors to collaborate. One of the examples was just access to information as on the tax preparation side. Yes, clients are usually pretty good about bringing in those really official looking tax documents like the 10 99 and W2s and things like that. What tax professionals don’t usually have is a 401k statement, potentially a brokerage statement at all. There’s a, there’s a lot, there’s real lack of transparency quite often on what else is going on in the client’s life. And so that’s information that the financial planner’s gonna have all day.


Yeah. And you know, there’s, there’s, this is again, why I think we’re gonna be better collaboratively than one of us trying to do the other’s job because as a tax accountant, like I think I have all of my clients’ information because I do the tax return, but I just don’t, you know, that IRA is a great example. And, and, you know, we had a client a number of years ago where they were working with a financial advisor and they had a brokerage account and it had, I can’t remember how much money we’ll say, you know, half a million dollars in it. And so I figured great, they’re working with an advisor. And so, you know, I don’t need to think too much about all the investment stuff. I’m just gonna do the taxes, which is really, you know, what my piece of puzzle is, well, that client had a 401k at work, which they’d been working at the same company for a bunch of years.

And they had set up that 401k to just go to cash. So they’ve been spending 15 years contributing, you know, some version of $18,000 a year to a cash account. But the advisor is thinking about the brokerage account. The accountant thinks that there’s an advisor in the conversation, looking at all the investments and nobody was looking at the 401k. Wow. You know, so how much value did that guy lose? Because he didn’t get just, just boring average investment advice, you know, you drop an index fund and have to do something, you know? Yeah. And so I think if me and that advisor were collaboratively talking at some point that 401k is gonna come up in the process. Now, am I gonna say, I think the advisor should have been asking that? I mean, yeah, but it depends on how that advisor structures that relationship. A lot of advisors think about the assets they control and they’re not doing holistic big picture financial planning.

And I think that’s where, you know, the folks over at The Perfect RIA and you know, all the things we hear over in Kitces and a lot of the evolution of the financial planning industry is you can’t do half of it. You really have to look at all of it. Even if you don’t manage it, you have to look at it because it’s part of their picture. And I think that mentality when I find an advisor that has that, and you know, I do know some that I’m very grateful for. Then I start, you know, thinking, okay, well, I gotta, I gotta look at the whole picture from my end, not just the taxes for this year, but you know, what about the estate taxes that are gonna happen 15 years from now? Or, you know, whatever the deal is and that holistic relationship I think it becomes a self feeding machine.

Each side’s gonna look at it more and more. There’s gonna be more conversations, crossing the aisle, and then there’s gonna be a lot of value on the advisor side.  I’ll tell you another very quick story. A couple years ago, I had a client who went to an advisor and they recommended that the client get into some investments, which I have no idea if they were good or bad investments. What I know is it was nine different publicly traded partnerships. And the client just simply did not understand what those things were. So they came in in February and brought in their tax information and we did the tax return and we filed it and then they got a K1 and then they went, “what is this K1?” I said, “well, I guess you invested it, some stuff”, you know, so I said, well, we’re gonna have to amend the return.


So I went, I started to prepare the amended return in tax season. Cause there was income and then another K one came in and they’re like, why do I have another K one? You know, I’m like, I don’t know. You know? Well, it wasn’t until the third K1 one rolled in that I said, stop  who did you talk to do that? Got you involved in this> I talked to my advisor, so and so do I have your permission to call your advisor? So and so, and get to the bottom of this, please? “Yes, Matt, you have my permission.” So I called the advisor and you know, I mean, I was professional, but I did chastise a little bit. If you’re gonna get someone into these publicly traded partnerships, you have to explain what a K1 is. You have to educate the client and you should inform their accountant that there’s gonna be these pile of documents that tend to come in very late now, you know, that was a easy opportunity. Like, no, I don’t tend to, you know, when I think of this from the CFP standpoint and going through that, I’m not particularly huge on that category of investment. And I know it creates complications on the tax side. You know, you can get a, you can invest a thousand dollars in a K one and creates two hours of work for me to deal with $2 and $3 and $7. You know, where’s your return on investment if you’re doing that. So understanding that the tax advisor has a limited amount of information and as the financial advisor, you can really help front load that and avoid a lot of problems and deliver a lot of value you to your client by just whatever your strategy is with your client. Making sure the advisor knows ahead of time, because I probably did well, I can tell you that client left that advisor and I might have played a role in that because I was so unhappy with the client situation and I tried not to, but you know yeah. You feel for your client, like they were bewildered and I charged them a bunch of money to deal with it.


Yeah. Well, I appreciate you sharing that story. It’s always helpful to have real life examples of how this stuff plays out. Yeah. I mean, so as we talk through this, I mean then the, the, the question that’s inevitably gonna come to mind for a lot of listeners is well great. And how do I, how do I find the Matts of the world who think proactively about this and aren’t just lost in a 1040?


Well, and you know, first you’re gonna go through the accountants in your client’s tax base. If they were smart enough to find you, they probably found a decent accountant somewhere. And then, you know, this brings me to you Steven like, you’re starting to solve this problem for, uh, other advisors. I mean, you’re working with clients and, and yet I like, I’m very curious. I’m planning curious, I’m tax curious. How are you starting to engage with people and, and, and managing this relationship? I mean, we’ve talked about, it’s a complex problem. I wanna know what you’re doing.

Action Items [31:42]


Well, Matt, I certainly appreciate that, that question. We’re, we’re running up on the end of, of the time here, which I could use as an out to move on and not have to answer, but, uh, why don’t we just we’ll we’ll hit record again and, and do another episode and I’ll answer that question for you. So you brought up an action item earlier, for everyone to make sure they’re reaching out to their clients tax preparers and, and establishing building that relationship. And then the other action item I’ll leave this with is be sure to listen in next week, we’ll all put together an episode with Matt, uh, letting him ask these questions of me. So,


All right. I’m looking forward to it. I have a lot of questions. I’m very curious.


Perfect. Perfect, Matt, thanks for being here and sharing your experience. Uh, thanks everyone for listening and until next week, good luck out there. And remember to tip your server, not the IRS.


The information on this site is for education only and should not be considered tax advice. Retirement Tax Services is not affiliated with Shilanski & Associates, Jarvis Financial Services or any other financial services firms.

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