Click Here To Listen To The Retirement Tax Services Podcast


  • The importance of being involved in taxes as a financial planner. (2:40)
  • Why it is essential to have great communication between advisor and CFP. (6:50)
  • How being involved in taxes can differentiate you from other advisors. (9:00)
  • The importance of always having your clients' best interests at heart. (11:00)
  • How to ease into the conversation about taxes as an advisor. (15:00)
  • Why you don’t have to memorize every single tax law. (21:00)
  • How to make communication easier between client, advisor, and CFP. (24:00)


Is it irresponsible as a financial advisor not to be involved in tax planning? Our guest today believes so. David Rae, CFP, DRM Wealth Management, has built a successful career developing comprehensive financial plans to meet life goals, retirement, tax planning, estate issues, and more. He’s also the go-to financial guy for both mainstream and LGBT print, broadcast, and online media. In this episode, he joins the show to share his thoughts on incorporating taxes into your financial plans as an advisor, as well as the importance of building a solid relationship between an advisor and a CFP.

Listen in as David explains how to avoid putting your foot in your mouth as you speak to your clients about taxes and his advice for easing into the conversation. You will learn that you don’t have to be perfect all day, every day when it comes to taxes or numbers, but instead have the resources to access in the event of an unusual situation and be open to having conversations with your clients.

Ideas Worth Sharing:

It’s a part of the fiduciary duty to be checking taxes and addressing taxes. - @DavidRaeCFP Share on X We all sell ourselves. We do sell stuff, even if it’s wrapped in advice. But if I am selling you something that you don’t need or doesn’t work for you, then I have a problem with that. - @DavidRaeCFP Share on X You don’t have to be perfect all day in every way. - @DavidRaeCFP Share on X

About Retirement Tax Services:

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Thank you for listening.

Read The Transcript Below:

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

Steven Jarvis:     Hello everyone, and welcome to the next episode of the Retirement Tax Services podcast, financial professionals’ edition. I am your host, Steven Jarvis, CPA. And today, on the show with me, I have David Rae, a CFP.

And I mean well-known personality on the news, a contributor for Forbes. Just before we start the episode, we pretty much insult all CPAs, but I kind of agree with him, so I think we’re going to have a fun conversation. David, welcome to the show.

David Rae:          Thanks for having me. And that was a compliment to you more than a dig at other people with different personality types.

Steven Jarvis:     That’s why we’re going to get along and have some fun today. To clarify, the comment was more around the financial planning world tends to be a lot more kind of people-focused and it’s a lot more communication and interaction.

And traditional, the CPA role is more of a let’s crunch the numbers and dissect the tax code and let’s report on a 1040. And there’s definitely a lot of other things that could be happening with taxes other than just reporting on a 1040.

David Rae:          Which is a great way to put it, absolutely. And I was more just alluding to there’s some more personalities, bigger personalities, probably, on the financial advisors space than average. But we’re happy to have your podcast here with some personality running through it.

Steven Jarvis:     Awesome. Well, David, before we just dive right into tax planning, why don’t you give just a little bit of background on what it is you do so people have some context for the comments that you’re going to make.

David Rae:          Absolutely. So, I run my own RIA called DRM Wealth Management. I’m coming up on 20 years in the industry. I started in the broker dealer world with probably 15 years in the broker dealer world.

So, I’ve kind of got the compliance, especially some of the stuff we’ll talk about where you probably can’t talk about taxes for at really the advice level.

Moving to my own hybrid RIA broker dealer under the broker dealer auspices, and then moving onto my own RIA back in 2017 when I could really actually talk tax planning. I really go in-depth for my business owner clients and tax-conscious clients, and really do a lot more stuff.

And then just, I really like to be in the media. I’ve done probably 150 TV appearances. I contribute to Forbes, as you mentioned and my blog, and just trying to give back to some other advisors so they can give better advice and just be better advisors.

Steven Jarvis:     That’s awesome. Thank you for your contributions there. That’s actually really why we connected. We’ve actually had the chance to meet in person now at our conference recently.

But someone had tagged me on a post on LinkedIn about an article you’d written for Forbes that I’ll probably get this wrong, but my general takeaway was that you were willing to very boldly say that really all financial planners should be involved in taxes and that it’s irresponsible not to be.

David Rae:          I really do think it’s part of the fiduciary duty to at least be addressing taxes, to be checking taxes. And there’s probably a range of where that service should be depending on your clients and certain clients need it more. But I definitely think it’s something you should be addressing.

You should be checking clients’ tax returns. It doesn’t mean going through every line and going through every deduction necessarily, but it means … I’m sure we’ve all had clients, especially on the CPA side where some form just gets missed.

And as an advisor, I know probably what accounts they have. I probably have a pretty good idea that you didn’t have $3 million of mortgage expense, and someone made a really weird typo.

Those are extreme examples, but they pop up. And then I also probably mentioned the article that some people just can’t do advice based on where they’re working, whether they want to or not. And I think a lot of advisors don’t even know they can or should be doing it.

And I might be in a minority of thinking it’s irresponsible to do it, as you mentioned in your question. I think part of the fiduciary duty is to making sure that this is getting done or at the very least that they’re getting good tax advice that’s proactive more than, “It’s April 15th, do you have a CPA referral? I need to file my taxes tonight.”

Steven Jarvis:     No, I’m right there with you. When I first started working with financial advisors, I was a lot kind of softer in my commentary on advisors being involved in tax planning.

I would say things like, “Oh, well great advisors are doing tax planning as well.” But I wouldn’t really frame it as a negative if you weren’t.

But I’m to the point where I really do genuinely feel it’s irresponsible to be making financial recommendations without considering taxes. Now, to your point, depending on your compliance environment, how far in-depth you can go might vary.

But I know people at the biggest broker-dealers in the country, the ones that are very stereotypically known for having crazyvlimiting compliance departments who are getting tax returns, who are at least bringing things up to their clients.

And yes, they have to have big disclaimers, but they see the value to the clients, so they’re spending time on it.

David Rae:          I think it can be done. I’m not in a wirehouse. I’m not in some of the biggest broker dealers anymore, thank goodness for my sanity.

But it is great to hear that they are able to do it. And I do feel that you’re probably going to have to push back on your compliance if you’re in one of those places or make some adjustments to things.

And there’s nothing wrong with some of these big disclaimers that go on there. It’s not my ideal situation to have; “This isn’t tax advice, but I’m giving you tax advice. Don’t listen to this, it could be wrong. We take no responsibility for this.”

I’m paraphrasing, I’m sure it’s probably seven pages that we’d be here all day if I read it to you. But you do have to probably make some adjustments, and the firm is really going to be at the lowest common denominator.

And there are things that I’m not a CPA, so … I’m a CFP, but I’m going to bring ideas to you. I’m going to bring tax planning strategies, I’m going to help you figure out if you’re doing it right.

And I’m going to hopefully, make your CPA’s job or as the advisor, hopefully you’re making the CPA’s job easier by bringing this to them in a nicely wrapped package with a bow and saying, “Here’s what happened, here’s what we’re doing, here’s how it makes you look good as the CPA.”

Versus I could picture kind of, I get the CPA telling a client they need to open a retirement account, they need to do this. And it’s five years later, and they still haven’t done it.

I could also see the advisor giving the client like some long-winded tax deduction strategy or something like that that they could be doing, and they take it back to their person, “My advisor said to do something, do you know what they’re talking about?”

And that’s probably about as specific as the sentence is, and the CPA is going to rip you a new one because they’re like, “What the heck are you talking about?”

And or it’s something that probably had to happen calendar year and we’re at tax season. So, there’s certain things that have to happen during the year that are very valuable.

Steven Jarvis:     Yeah, well, that’s certainly a great sales pitch for what we’re doing at RTS because one of the places we find a lot of value is that game of telephone on taxes where advisor probably gives a very legitimate and productive recommendation, but if the advisor’s not owning the communication with the CPA, things are going to get lost.

And so, I’ve definitely had taxpayers who come to me and say, “Yeah, oh my advisor told me that I’m not going to pay any taxes this year.” And I say, “Oh, great. Why don’t I reach out to your advisor? That’s one of the benefits of us collaborating together and make sure that we all understand what’s going on.”

And then I hear back from the advisor, and they’re like, “No, I told them on that one little thing, they weren’t going to pay taxes. And then their takeaway was, I don’t pay taxes at all.” And so, yeah, being able to have those broader discussions

David Rae:          And they just bought a new boat with that money, right?

Steven Jarvis:     Yeah. That’s the one I see come up more often than I would like of there being a disconnect with the advisor and the taxpayer of, “Hey, we’re generating the cash right now and you’re going to have to pay the taxes later.”

And then tax time comes and it’s like, “Wait, I need how much? How big of a check do I have to write?” Yeah, those are fun conversations.

David Rae:          It’s never fun to write those checks, but when you know that it’s coming, it’s a little less painful and it’s also less painful if you can … okay, you had an amazing year, this is a good thing. You made way more money than we expected, and we’ve done our job to minimize it. Still painful.

Some of those checks are very large, but it’s nice to know it could be much larger. So, if we’re doing our jobs and we’re working together, we’re going to hopefully at least avoid missing some of the big tax deductions that might come up or at least be aware ahead of time that “You had a record year, and a lot of people had record years the last two or three years. There’s some big tax bills coming, but we’re going to implement some strategies to minimize it as much as possible.”

Steven Jarvis:     That’s right. As much as possible. As we are getting ready for the show, we are kind of talking about how, depending on who you surround yourself with, tax planning can feel a little bit commonplace for advisors.

If you listen to the RTS podcast all the time, if you listen to our friends over at the Perfect RIA, depending on who you surround yourself with, you might start to think, “Ah, well everyone’s doing this, it’s really not that much of a differentiator.”

But as you and I were talking about it, it’s a good reminder for our listeners that if you are doing effective tax planning as an advisor, you are on the cutting-edge of the value you’re providing to your clients.

You are in the very small minority of advisors who are really doing that full service. If you want to throw out any words like holistic or comprehensive or full service, like you really have to have taxes included in there.

David Rae:          I agree 100%. And I think what we’re kind of alluding to, is it’s very easy if you’re in … we are at the conference and everyone there is kind of running similar businesses and they’re probably at similar places or they have similar mindsets on it.

And so, everyone there is probably doing a lot of this or even at different levels, but they’re conscious of it or they think they’re doing it. It feels like everyone is doing that.

Then you go to another conference, or you talk to someone in another part of the business, maybe works at an insurance company or a big broker dealer, or a captive agent and they’re like, “Nobody I know is doing this.”

Everyone is like, “I still occasionally tap into some other podcast.” They’re like, “Oh, everyone’s doing seminars and selling annuities.” And I’m like, “Wait, when was this taped?” This is like COVID. I’m like, “No one’s doing live seminars.” I’m like, “What the heck are you talking about?”

I mean, that still might be their business model, but I’m like, “I guarantee you I’m not going to set up an in-person seminar to try and sell you an annuity beyond just the in-person during COVID part.”

Let’s just start with that. Forget the annuity, forget the sales, forget fiduciary. But you can be in those places and if everyone you work with or everyone you talk to is doing it, and I know a lot of people listening may be in like a mastermind group and you probably are doing a lot talking to a lot of people that are maybe similar to you.

And again, you think everyone’s doing it, they’re just not. If you go to a broker dealer, if you go to a wirehouse — I have some amazing successful people managing billions of dollars and they’re like, “Oh, we don’t consider taxes at all even when trading” which I would think is just kind of the basic stuff.

And I’ll talk to wholesalers at companies and they’re like, “Well, you don’t want to make your investment decisions based on taxes.” I’m like, “Not taxes alone.” But if I think a company’s going to go bankrupt, the taxes aren’t the big issue if you have some capital gains there.

But I want to be aware of it might go long-term versus short-term. I want to be aware of tax harvesting in a year like 2023 where there’s probably some losses to help offset income.

I mean, there’s just a bunch of little things that I don’t think is really crazy tax planning by any stretch, and isn’t probably considered part of your job if you’re just selling people mutual funds. But it’s something you should be doing and hopefully, you’re selling more than mutual funds to people.

But that’s been my opinion. I’m a person who likes to give advice and my value is helping you reach your financial goals and take stress out of your life. Not I have the best combination of these three mutual funds or ETFs or whatever the heck you’re selling or using.

And by the way, I do think we all sell ourselves, we do sell stuff whether or not … even if it’s wrapped in advice. Even a CPA doing taxes it’s still selling their services.

Steven Jarvis:     Oh, absolutely.

David Rae:          So, it’s not a dirty word in my mind, but if I’m selling you something that you don’t need or doesn’t work for you, I have a problem with that.

Steven Jarvis:     Yeah, there’s a lot of great stuff in there and I 100% agree that sales has been turned into this dirty word, but to me, it’s communicating in a way that’s going to prompt people to take action.

And so, hopefully, we’re doing that in a way that’s prompted them to take action that’s valuable to them. But as you were going through that, one of the thoughts that kind of stood out to me is that yes, I mean doing tax planning of any kind of puts you really in a small minority in the industry.

But regardless of where you’re at on that tax planning spectrum, great news, Congress is constantly changing the tax rules. The IRS is updating the limits and guidelines. And so, this is an area where you can always be improving your game.

So, saying that there’s a small minority doing tax planning, it’s not a criticism. If you are new to tax planning, you’re not there yet. As long as you’re working on it, everyone’s got to start somewhere.

I mean, David, I’d love to hear from you and kind of what that transition looked like from you were in the BD world, there wasn’t much you felt like you could do, then how … you got to learn the taxes at some point.

You can’t just suddenly say, “Oh, I’m a tax expert, let me talk to you about this.” So, what was that transition like? How did you incorporate this into your practice?

David Rae:          Absolutely. So, I was looking through some old blogs, and I was like, okay, when I was in the BD world there was like no mention of taxes barely. And the most, it was like it’s pre-tax when you use the 401(k). It wasn’t even like taxes. It’s like I can say this sentence.

And I slowly started adding things in and my niche really is the gay community, which we had some big changes with gay marriage which really changed people’s tax stuff. So, I had a lot of changes with the marriage law, so kind of tax planning around whether being married … marriage penalties and things like that.

So, I just started learning a lot about that stuff, and it just kind of came up, and you talk a lot more about it. And I work with a lot of business owners that now that I’m in an RIA space, I can charge quite a bit of money for more of a holistic planning rather than just managing some investments.

So, really going into their taxes is really a big value add. Or if I’m coming in and saying, “You should put a hundred thousand dollars into this retirement account.” They’re going, “Where the heck is this money going to come from?” I’m like, “Oh, wait, did I tell you we’re saving you $150,000 in taxes?”

Not off that hundred, but the tax planning saving a good chunk of it, or it might even just be … I’m in California, so it could easily be 50 cents on the dollar savings if we’re going into the retirement accounts, if you’re at the higher tax brackets with the state and federal.

So, it’s just kind of learning over time. I do blog a lot and I do on TV, and I was doing a lot during the Trump tax plan. I was doing a lot of TV segments, so I was really digging into it. You just learn more about it and you have to have just the resources where to go to when things come up.

And I think you guys put out a lot of good stuff at Retirement Tax Services of just, here’s what you need to know. I don’t need to know how to do it, file a tax return.

I’m not going to be an EA or a CPA at any time ever. That’s not what I want to be doing. And I talk to enough advisors who are kind of duly registered and they’re like, yeah, “I’d rather be an advisor.”

So, that seems to be the direction to skew or they’re doing taxes for their clients. But you can learn over time, and really look at your niche or who you’re trying to work with.

And it might be tax tips for retirees and it might be 10 or 12 things with how to minimize RMDs or strategies with Roth conversions or just things like that. And learn one or two things and be really good at it, and start to learn that and you just add over time.

I mean again, you don’t have to learn everything all at once. And I’m sure you’ve been doing this quite some time, so you know a lot more now than you did at the beginning. And your point, tax laws will change again, so it’s not like learning is done.

So, just put yourself in a position where you’re learning, you’re improving yourself, you’re improving your practice, and it’ll just keep coming out. And I probably wouldn’t day one say, “I’m a tax expert.”

“And all of these things, but I can help you with tax planning can help you with this or I’m a tax expert on something specific.”

Steven Jarvis:     Yeah. So, I guess one of the questions that comes out of there for me, because I have been involved in taxes for a long time and so, I haven’t done this personally, where as an advisor, I’m going to now start offering taxes as any kind of service.

And so, maybe that initial year, those initial couple of years, what does that communication look like with clients? Because I get a lot of advisors who are hesitant to get started because they don’t want to ask for a tax return because what am I going to do with it?

So, I mean, maybe what was the messaging originally, and then how does that messaging evolve as you’ve become more confident in taxes?

David Rae:          Yeah. As you build systems and processes to kind of figure out what to do with that tax return, even if you’re not doing that, I think everyone should be picking up tax returns.

And it can be a hassle, especially if you are dealing with retirees who are still getting paper returns from their CPA and magically that has to get from A to B and somehow get scanned. Hopefully, not one page at a time, from their flip phone that are texted to you.

There are better technologies, but I have one client left that still does everything via mail, and it drives me nuts, but they’re very nice.

But to kind of ease into it, but just start talking about taxes and the things that you’re doing more being like, “Look, even if it’s just as simple as if we put some more money into your 401(k) or your IRA or your retirement account, you can save on taxes.”

Or “Tell me about your income for the year, and being like you’re a business owner, you’re having some big tax deductions this year,” or during COVID there were businesses that were shut down, and be like, “You didn’t really make any money before yearend, why don’t we do that bigger Roth conversion that we’ve been putting off?”

Like there can be little things that maybe are stuff you’re dealing with that aren’t full tax planning, that aren’t full really holding yourself out as an expert but you know enough about to maybe do the Roth conversion.

And again, your client’s not going to double check you and be, “It should it be $15,204 or $15,205.” It’s the optimal perfect number to do.

I think some people listen to this are probably pissing at me, but I just do a nice round number most of the time, right around where it should be, making sure we’re not hitting some of the big numbers. But I also know the numbers they tell me before yearend aren’t probably the exact to the penny dollar of the final number.

So, I like to leave cushions most of the time so we’re not missing some Medicare number by a dollar or missing some refund by a dollar, which is where you really put your foot in your mouth, I guess, would be my most kind way of handling some of those things.

But just easing into it. Again, you don’t have to be perfect all day all at once. And a lot of times when you’re bringing this to the client, it’s a conversation about ways you’re helping them, and more ways you can help them and more value you’re bringing.

More than here’s the exact number of this or here’s some deductions. Just research on tax deductions that someone in their position might be in. Write an article or do a podcast about it, and you’ll learn more about it on your own and some of the specifics on it.

And you can help bring it to them and being like, “Calculate this number or keep track of these expenses that could be tax deductions for you, and we’ll figure it out later.”

Like “Okay, are those races that you’re doing business expenses? Are you wearing your company logo? Can we write off that jersey maybe?” So, track that stuff. Simple things.

And even I’m sure you have some business owners that still have receipts. I hope now people have Quicken or QuickBooks. Just getting business owners on that could be like your first step and it’s nothing you have to do as the advisor besides getting them to track their expenses so that tax planning actually is doable and easier later.

Steven Jarvis:     I did just make my first, or I did just design my first custom pair of shoes. A very simple process. They’re themed for my family, not my business. But yeah, RTS race shirts are definitely coming.

But really, what I want to highlight out there David, I like how you talked about easing into it because I think a lot of times as business owners, as advisors, we can get hung up on if we’re going to do something new, it has to be this monumental change.

We got to redesign our website and put out a new brochure, and change all of our onboarding process or like take all these huge steps. But I think you’re really giving the recipe for success there of you already have client financial information.

Ideal would be that you’re getting tax returns, but if you’ve made any financial recommendation to your clients, you have enough information to start thinking about taxes, and then to ease into that, to gradually add more and more.

It starts as simple as helping a client understand why you recommended pre-tax versus after tax. Great start there, and then keep moving forward. I love the example that you gave for the clients that you serve of when gay marriage became legal, that that was this huge tax thing for that group.

So, look for things that are specific to your niche to help you narrow in on what you should dive deep on because the tax code is really, really, really, really, really, really big. And if you set out to learn all of it, you’re going to be disappointed and quit.

But if you can pick a couple of things to say, “Okay, these impact my clients, I’m going to write a blog article. I’m going to go on a podcast and talk about it.” whatever forcing mechanism you need to make sure that you do learn more about it, that’s a great way to slowly add to the value that you provide to your clients.

Because I’m sure, I’m guilty of this at times, I know there’s advisors out there who, not intentionally, but they’ll casually talk about tax planning like they just woke up one day and could do it that well.

When you hear the “experts” talk about it, I mean know that there were years that went into that, and you just need to get started. Or for those listening wherever you’re at on that journey, just commit to that next step to keep improving that.

David Rae:          Yeah, and you don’t have to memorize all the tax brackets, you don’t have to memorize all the tax laws, but you want to have things that you’re listening for or things that are relevant that come up. Because I’m sure there’s some of the obscure parts of the tax code that are probably really great things to specialize in if you’re really into that or that works for you.

But there’s some things that you’ll probably never see in that tax code. I know there’s some really special exceptions along the way that I won’t bore with that I’ve heard of here.

But I’m like, “Yeah, my clients in LA are not going to have, I don’t know, moose hunting tax deductions or something.” Maybe they do, they fly off, but it’s going to be much rarer or land easements. I’m like yeah there’s not a lot of extra land laying around in LA or Palm Springs.

Just things that I’m not going to deal with on a regular basis, but I need to know where to go or who to talk to if that were to come up, and just have resources for the crazy things. Learn about the things that you can do and just keep expanding. And I think all of us advisors should be learning ongoing, it’s never a finished product.

And I think you brought up a good point, that we are all learning whether we know it or not, hopefully, over time. It may not feel like, oh I went back to college and got this new degree but it’s like I learn a little bit every time I listen to a podcast or every time some new tax law changes. Well, there’s some new information even if it’s not necessarily a new skillset, it’s just a new conversation about something.

Steven Jarvis:     Yeah, absolutely. David, to put you on the spot just a little bit here; how many of your clients do you get tax returns for every year?

David Rae:          I get about 70, send me their tax returns. I probably have 120 clients. 50 of them are more just asset management only. So, they’re kind my legacy clients have taken over. People I know I still should be probably getting their tax returns but their W-2, I know it’s standard deduction so there’s not a whole lot going on there.

But the 70, there’s much more of either equity compensation or business owner, or like a home sale or things that are more complicated. But I would like to make that an easier process because I want it to be on all of their minds and I think I would get more referrals now that you put it put me on the spot there from the people that I’m not necessarily doing that for.

So, they call me when, “Oh, I just started a business” so that we talk about it before something changes because clients do change over time. You can have your niche and clients move outside of your specialty, they move back into your specialty.

I’m not going to lie, even on the gay thing. I’ve had people that were gay that weren’t or weren’t gay and now they are. So, hey, things change and people change careers and people start a business, stop a business, start a new business. But get those tax returns and learn how to learn how to read them.

I know there’s lots of resources out there, some better than others. Just what to look for and even just telling that you’re doing that, people really like to have a second pair of eyes on it.

And you may find … unfortunately, I’ve had over the years a few people that use TurboTax themselves were a little creative and well, there’s pushing the boundaries and there’s like those headlines where people get arrested. So, that’s not a fun conversation to have.

Like again, I joke but like “No you did not have a $3 million deduction over here. You don’t need to write a check for a million dollars but what are you thinking?” I’m just saying “Tax fraud.”

Steven Jarvis:     My goal in asking the question was not to help you improve your practice, but if I had that byproduct, then great, the next time we have you back on, we’ll see how that number’s improved.

But really, I asked because I was confident that you were getting a large number of them, which actually I appreciate your transparency there because again, back to our conversation about easing into this, doing anything related to tax planning, including getting tax returns. This doesn’t have to be 100% on day one.

It sounds like you focus more on the clients that you’re doing a lot more active planning, which absolutely those are the clients that you should start with getting tax returns, and then it’s a building process from there.

If it was up to me, financial advisors would get a tax return for every single client every single year. Because even on the simple ones, you might be surprised at times that there still are things there. So, yeah, I’ll look forward to the next time you’re on the podcast. We’ll get that number up.

David Rae:          We’ll get that up and I think it is a good thing to be getting to your point. And then there’s also some people you’re like, “Okay, they’re not going to send it.”

Steven Jarvis:     Absolutely, absolutely.

David Rae:          But again, there’s a lot of things that I think with the dishwasher rule, I love you guys talk about that there’s things that like, “I can do this for you when it comes up or “I looked at this and you didn’t need it” or “Has anything changed” and if they’re just not going to send it in, they’re just not going to send it in.

But there are people where it is problematic if they think you’re doing tax planning for them, and you are saying you’re doing tax planning for them and you’re not getting the tax returns. That’s where some of these disconnect can be much more problematic than, “Okay, you could have made this $300 deduction and you missed it.”

Steven Jarvis:     Well, and to your point about especially DIY tax preparers, this happens with professional tax preparers too. If you are not looking at the actual tax return, I would definitely hedge your bets on the accuracy of what you’re being told.

And it’s not intentional. It’s back to our conversation about that game of telephone. If you just ask a client and take their word for what’s on their tax return, chances are they don’t understand half of what’s there anyways. And so, they’re not going to be able to relay it back to you accurately.

And so, you need to look at the actual data. If you’re managing investments, there’s no way you’re just taking a client’s word for what holdings they currently have. You’re getting statement. Like I’ve never had an advisor try to tell me …

David Rae:          I count up like 10 billion percent I’m the best investor ever.

Steven Jarvis:     10 billion percent, perfect.

David Rae:          Yes, yes, you are, I’m sure. Or to your point, “Oh I paid no taxes last year because they didn’t owe taxes at tax time.” Which is again, is not the same. I do like to see the calculated numbers.

I do like to see if there’s something weird there. I like to see if something’s missing, or if nothing else, just if their view of what happened, or the view of the world is different than what their tax returns say.

Because there’s definitely … if we’re at a cocktail party, I think all of our incomes could be way higher or way lower depending on which direction you’re trying to present yourself. I’ve met some people and I’m like, “There’s no way you’re making that.”

Then I also know some people that are really, really, really, really, really rich and they’re like, “Oh, you know my salary’s fine.” I’m like, “Well, yeah you take your penny salary from your corporation.”

“I saw your newspaper article about your bonus last year that was millions of dollars. But that’s nice that your salary’s a penny. No one believes you bought out a house on a penny.” But that’s just my word.

Steven Jarvis:     So, David, we always love to take the information that we’re sharing and make sure we turn it into value, which means turning it into action.

So, as you think about the things you’re currently doing for clients or how your tax planning abilities have evolved, what are action items you would recommend to people listening to the podcast?

David Rae:          I think you brought up an easy one for me, is find ways to get more of your client’s tax returns and find ways to make it easy on yourself and automatic. Because if you just ask for them at the annual reviews, whatever, it’s just a 10-step process, but there’s ways to get it securely or have them scanned over.

And also, if you’re dealing with the TPAs, you can get those pretty easy. Look for ways to just add to your tax planning skills. You don’t have to be a tax planning expert day one, but look for one or two ways that you could help your average client or your better client or who you want to be your client.

Even probably, if you need some motivation, maybe look at your top 10 clients and be a little more aspirational on what would help them so you get more of them rather than the bottom of your client base.

I don’t really want a bunch of earned income tax credit clients, but that’s me. But good for you if that’s your niche. I also don’t like debt settlement and things like that. But again, that’s me.

And always be learning. You’re listening to this podcast, you’re probably learning more than the average advisor, and be confident and be aware that you are probably doing more even at step one by taking the step than most advisors out there.

Feel confident, even if they’re at that big firm. I know a lot of people, listeners are probably independent. I don’t have a big office and a hundred-story building on Wall Street, but I can go in there and be like, “You don’t have to pay for that office and those 27 secretaries and the doorman.”

So, I’ll give you hopefully more value for your fees, and you’re hiring me because I’m good at what I do rather than the office I have. And that doesn’t work for everyone, but it works for a lot of people.

But be confident, you can compete for these larger clients, these clients that you think are out of your reach. You can do a lot for people, and you probably already are doing a lot more for your clients than a lot of advisors out there.

Steven Jarvis:              Yeah, absolutely, I totally agree.

David Rae:          I think those are my three, but I’m sure there’s more mixed in.

Steven Jarvis:     There’s always plenty of action items that can be taken. But to your point, let’s ease into this. Make progress. Don’t let perfection be the obstacle of making progress.

So, David, I really appreciate you taking the time to come on the show and share your experience, being honest about where you’re at with getting tax returns. I love that you are getting so many of them, that you’re working with your clients on that stuff and that you’re willing to admit that, hey, this is a continual progression.

I look for things every year with my team for myself and my team to say, “What’s that next thing we’re going to do for clients?” So, love your commitment to that.

You mentioned that you’re very active in putting content out there. If people are interested in following what you’re doing, what’s the best way for them to follow along with what you put out?

David Rae:          You can follow me at Forbes. If you just google David Rae, Forbes, it should pop up. I put out five articles a month there give or take. And then my blog is So, there’s a bunch of content there as well.

And I do a lot of TV appearances, so they usually end up on my blog is usually the easiest way to find those. Because some of them are local and I’m going to guess some people watching this don’t have cable. So, the internet has made those videos much more valuable to me and to my audience.

Steven Jarvis:     Absolutely. Well, again, David, really appreciate you coming on. Love those action items, making sure you’re getting tax returns from your clients. Making sure you’re focusing in on those things that apply to your niche.

I think every advisor should be able to quickly, like David was able to today, quickly say, “Here are the top things that impact my clients.”

And if you’re listening, you’re not able to do that yet, great. Start getting those tax returns so that you can see what those common themes are. That’s going to be a huge value add to your client. And to your point, it’s going to help you gain more of those clients that you want to be working with.

So, for everyone listening, thanks for being here. Until next time, good luck out there. And remember to tip your server, not the IRS.

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


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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