Read The Transcript Below:

Steven (00:52):

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 here for the last episode of 2024, I have an incredible guest with me, John Pastore, who’s an Executive Vice President with Integrated Partners. John, welcome to the show.

John (01:10):

Steven. Thanks for having me. Glad to be here. Thank you.

Steven (01:12):

Yeah, absolutely. I’m really excited to wrap up the year on this conversation because what you guys are doing at Integrated is something that we’re seeing more people try to venture into. Sometimes people think, Hey, we just came up with this new idea that Integrated has been doing for decades. But, Paul Saganey was at our conference this last year and we’re really looking forward to having you guys be a part of what we’re doing going forward. But really where I want to start is give some of the background of integrated partners, how your model is different than so many other people’s, and really why you guys committed to this model so early.

John (01:48):

Absolutely. So you mentioned Paul Saganey and Paul and I, we started together. Obviously he is just ahead of the industry and continues to be just a thought leader in so many areas of financial services, but he tasked me with creating our programming. At the time, I was the director of national accounts for Marriott, and what we pulled from Marriott was a spirit to serve. His vision for this was let’s create a program that really caters to the CPA and all of their needs. Instead of having it just simply built by an advisor, one-off partnership, let’s build this into a program. And as we’ve done it through the last 25 years, we’ve just continued to reach levels of frustration and then have frustration breakthroughs. So we’ve created some fantastic systems. Steven, I’m excited to share some of those with you today that really defines us as a different firm. And our name Integrated Partners is a description of what we do because everything revolves around tax and working with the most trusted advisor, the CPA.

Steven (02:58):

And John, you’ll have to finesse this description, but from a very high level, really what Integrated figured out very early on is that financial advisors and accountants, CPAs really should have a very collaborative, integrated relationship. And it didn’t really exist back then. And honestly, we’re still really in the early stages of people figuring this out. And so it’s really all about letting people do what they’re best at, but then collaborate because we’re seeing more and more firms who will hire a CPA or two and bring them in-house with mixed results as to how well they can effectively incorporate those people. But really from the jump you were saying, Hey, let’s find good CPAs who can keep doing good CPA things and let’s find good financial advisors who can keep doing good financial advisor things, but let’s help them collaborate. So just so we’re real clear, when did this all started? When did you, because this isn’t one that five years ago when people started talking about taxes more, you guys really are kind of the originals.

John (03:54):

It’s about 25th year of doing this, Steven. Wow. 25th.

(03:59):

Year. Back then when we started, the states weren’t even, they weren’t Greenlight. They didn’t have the approval for CPAs to receive revenue. Now, a lot has changed since then. So we started off with, it was commission, bad word. And now we moved into integrated as a fee-based multi custodial wealth management firm that has very high-end capabilities from family office to business succession planning. We have over 13 CFAs now on our team. So from those early days of our genesis, we’ve really grown, but we’ve just listened to the CPAs and provided them everything that they can feel confident going to their clients and offering this service. And the same holds true for the advisors. So everybody wants to build these relationships, but there’s a lot of moving parts, right? We’re in a highly regulated industry, CPAs, they’re having their own headwinds, whether it be staffing, private equity, moving into the marketplace, technology and the proper use of that technology. So we really have built a program over the last few decades that helps us get in line with the CPA and help them face the challenges that they have together with us.

Steven (05:16):

That makes so much sense. John, I talked to so many advisors who are looking to expand their value offering. That’s why I was excited to have you on the call is because or on the show today is because all these advisors are looking at, you have ones that have the negative perspective of, oh, no fee compression. I like talking to the advisors who are more about value expansion. They say, okay, how do I do more for my clients? And so I would love your perspective on this because when those advisors are starting to kind go down this route, really, I mean, you have a lot of different options of ways you could expand your value proposition. Taxes are certainly not the only one. If you started from a more traditional financial planning background of investments and your next 10, 20 years, what does your retirement look like? Some of these different topics. I mean, you could go taxes, you go estate planning, you could go deeper on insurance. There’s these different things you could do. So why did integrated start with, Hey, it’s got to be taxes? Because I don’t think it was by accident.

John (06:10):

No, you know what I think it was? It was that we realized that the CPA controls a lot or touches a lot of the wealth in this country, and we know that there’s going to be a massive wealth transfer, and we wanted to get ahead of that. But that transfer includes, just to your point, Steven, it includes a lot of consideration from growing the wealth. We want to do that tax efficiently.

(06:35):

So year end tax planning, helping the CPA be better at their own craft because we bring a few ideas to the table that maybe the CPA doesn’t either know or doesn’t have the time to implement. So becoming that partner allows us to help grow that, the assets for their clients and then transfer, right? So it’s dual then distribution. So grow that wealth, then distribute that wealth during their retirement years and understand what are the most efficient ways of developing a distribution plan. And then lastly, once they understand their necessary estate, what they need to live on, clients then have an idea of what their excess estate is, what they need to transfer to the next generation or what they can transfer to the next generation, and how do we do that efficiently? So then building that collaborative approach that really has become the backbone of our organization.

Steven (07:31):

John, I’d love your thoughts on this because any industry, but you and I spend time in this industry, you see certain buzzwords that come up over time. And it always feels to me like if you have to lead by telling some people something about yourself, it’s probably not as true as you think it is. And so words that come to mind for me from a financial advisor marketing standpoint is the people who always feel like they got to tell you that they’re a fiduciary or that they do comprehensive planning or they do holistic planning. It’s like, no, just tell me what it is you actually do for me. Because when I think about comprehensive or holistic planning or whatever words you want to use, for me, taxes have to be a piece of that and not just, I said something about taxes and wished you all the best, but that as the advisor, I’m shepherding that relationship.

(08:10):

I’m making sure that the tax planning we did together got reported correctly. Because if it doesn’t get reported to the IRS, it may as well have not have happened. And so not that everyone needs to go out and copy the integrated model on day one. I would recommend that if you’re interested in that, just become part of it. But from my perspective, if you want to use these words and assert to your clients, Hey, we cover everything. You’ve got to have these relationships that you’re building. So John, you mentioned reaching frustration points and then breaking through them. I do see a lot of challenges out of the gate for people who have never done collaborations between advisors and CPAs in how those relationships, how those communications work. So were those any of your frustration points along the way of how do we get the CPAs to play nice with the CFPs and vice versa?

John (08:56):

Steven, you’re nailing it, right? So if you look at the way that we integrate financial services, let’s start there. The first way that you could do it is you can insource. So you’re a CPA and you want to take it in-house, you do it all yourself. So now it’s all on your back. Now they’ve got the burden of how do I let our clients know that we’re in business? Exactly what we do. And the challenges are they have to learn all the different products. They have to learn all the different concepts. So it’s very tough for a CPA to do that. The second way is to outsource it, just refer business out. But the problem, Steven, there is nothing comes back, right? Maybe you get a fruit cake around the holidays and you just gave out to your earlier point, you just gave out a profitable engagement, the opportunity, and that just walked out of your office along with the intrinsic value of owning that opportunity.

(09:45):

That has a value too. So what we do is called the co-source. And the co-source is where we match up capable advisors and capable CPAs that are looking, that are forward thinking and really want to address some of the challenges. But to answer your question, the frustrations are day one, right? So, hey, how are we going to market this? And we have a genius on our team that heads up our marketing department. Our marketing department is just a group of incredibly thoughtful, talented people that help our advisors and our CPAs get that word out. But we have privacy rules that we need to be thoughtful of. We have compliance, highly regulated industry. You can’t just whip out a AI generated letter and just send it out. Compliance needs to be approved. So we’ve built a library over the decades of how do we get that first 90 day plan rolling?

(10:43):

What does the introduction look like? Let’s give the CPA firm choice on how they do it, creation of the, so that was a frustration. How do we get that message out and our team knows how to deal with all of the regulatory issues from both sides of the fence, CPA and advisor and create confidence that we can get that out? Because if not, the CPAs are just going to sit there and say, Hey, whatever comes our way, we’ll refer it over. But if we let people know that we’re in business and exactly what we do, that was one of the big frustrations. Another frustration is how do we get paid? So there’s things like operating agreements. Do we set up an LLC? Do we have to get licensed? Do we not have to get licensed? And we demystify that because that question is answered state by state, and we have a team. Our council helps every CPA create their own unique payment plan, which that trips up a lot of advisors too. So these barriers to entry can destroy the opportunity before it even gets started. And then of course, there’s the support. You never want to be the dog that chases the car and doesn’t know what to do with it when they catch it, right, Steven?

(11:56):

So it’s having that high end case design team that the advisor can then lean on. And you might say, well, which one of these things are most important?

Steven (12:06):

They all are.

John (12:07):

And a track record of excellence that you’ve really, we have that we’ve earned CPA by CPA that Hey, we have successful CPAs, small firms and large firms, and everything in between.

Commercial (12:20):

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Steven (12:54):

I’ll never forget the first time I met an advisor who was part of integrated, because it was really early on of when I’d started retirement tax services. So I’m not new to being a CPA. It was very new to being in the financial planning world at that time. And a lot of the things that we were set out to address, I was talking to his advisor and he’s like, oh, yeah, yeah, the firm I work for, they do that. And I’m like, yeah, yeah, yeah, but they probably don’t do this and this. Oh, no, no, no. They’ve got that covered. And just that list you just went through. They were just able to go through it and say, yep, here’s how they take care of this and this and this. He’s like, oh, I need to learn more about what’s going on here. Because as you were talking about how these relationships form, I mean, the other piece that’s really in there is that a lot of advisors can’t even find CPAs who will take referrals at all.

(13:39):

I mean, ignore a formal relationship and any kind of revenue sharing agreement. We have advisors coming to us who just say, geez, the CPAs I know just won’t take on new clients. I mean, you mentioned there’s definitely headwinds in the CPA industry and a staffing shortage is one of those. And so there’s a whole list of value that an advisor and a CPA get out of working with integrated. But on the advisor side, geez, there’s a piece of that. And it’s just, hey, now you’ve partnered with someone who says, yeah, the first person I’m going to take a new client from is John because we have this relationship. And so there’s so many phenomenal things that come out of that. I like that. It still comes back to, I don’t think you’ve explicitly stated this, but it should be obvious to the listeners that you did mention case design and hey, what happens when the dog catches that car? This still has a huge focus on client service and client outcomes, which you mentioned in your background of you didn’t come from being a CPA or financial advisor. You came from Marriott. You came from one of the premier companies in the world of providing incredible experiences. So we’re really talking here about what some of the mechanics look like, our audiences advisors here, but at the end of the day, this is still creating incredible client outcomes. Or am I misjudging that?

John (14:50):

You’re nailing it, Steven. You understand probably better than a lot of people that we talk to the need out there and retirement tax services understands that as well. That’s why I think there’s a great marriage between the two companies and that there’s a huge need in the marketplace, and that’s not getting any better. Things like the five-year rule for education. I mean, we hope that that changes, right? Because that’s a big barrier to entry for parents that are educating their students, right? In the accounting world, it’s a 20% extra fee to get someone through a fifth year of college, and then you have to sit for a pretty intense test. There are some headwinds that I think that both our organizations think about and create solutions for just by its design. And the benefactor is the client. And when the client’s happy, you get such marvelous outcomes.

(15:42):

You mentioned fee compression. We’re not worried about it. You don’t know why. Lemme tell you advisors that are expert level at giving advice and collaboration with other experts are going to win. And I think you understand that so well, and you articulate that so well in your podcast. And that’s what our value proposition is, is that we understand if we are in the advice business and we have the resources that back up our advisors, all they really have to focus on is being the best advisor that they can be. And the relationship with the CPA will take care of itself because they’ll say, Hey, this advisor, the wonderful guest in my house, they bring a lot of value. And you know what? The startup fee for this is minimal. Think about it, Steven. They would have to go out and hire a successful advisor, which what’s the value of that?

(16:37):

And then that advisor would have to have an infrastructure. How much does that cost? Now they’ve become a science project because it’s the first one that they’re trying out, whereas you get to use our track record to do that. So the co-source methodology really has proven itself that it’s the way to go. And at the same time, the CPA firm is building intrinsic value, and so is the advisor, right? So they’re building enterprise value in an entity. We all know the multiples. So it’s a win-win for everyone from a cashflow standpoint, from a complexity standpoint, getting into that higher market that everybody wants to strive for, getting in front of more complex situations. And then lastly, the long-term building that enterprise value and being able to benefit in whatever way you would like to distribute that at some point.

Steven (17:28):

Yeah, there’s huge opportunities for everyone involved to win. John, as the calendar turns over and we’re about to kick off a new year where, I mean, we go immediately into the tax filing season. And so I’d love to spend just a minute talking to just our audience at large about just maybe reminders. They might even be things I’ve talked about on the show before, but this is the time of year to say, here’s what separates collaborative financial advisors and constructive financial advisors from the ones that CPAs don’t like. Because unfortunately, there’s plenty of those. And that’s not to say that CPAs should immediately be given a deference and are somehow better than advisors. But the reality is, consumers give the benefit of the doubt to the CPA over the advisor. And so we just need to be aware of that going in. And so as we go into a filing season, I’m always trying to remind advisors of things they can do to again, create better outcomes for their clients.

(18:17):

You can certainly approach the filing season as, ah, well, the tax return is the CPA’s responsibility, so best of luck client. Let me know how it goes. Or whether you’re on the steps of going into a co-source model like joining integrated, or you’re just starting out and you’re just like, you know what? I just need a better relationship with the CPA next door. I mean, there are positive ways to do this, and there are ways that you’re just going to maintain the status quo. And the first thing that comes to mind for me, John, is that we’ve got to be incredibly mindful of what the calendar looks like. So as the calendar turns over, you’ve got maybe two weeks to be having nonspecific tax return conversations with CPAs, maybe two weeks. But this time of year, as you’re reaching out to CPAs that you want to have relationships with, you got to make sure that you’re focused on, Hey, how do I make their life a little bit easier?

(19:04):

And how to make it clear to them, I’m looking to make their life a little bit easier. I’m offering to send a 1099 letter or provide insight into questions they might have when they go through the tax return. If it was me, I’d be reaching out to every CPA in my network and saying, Hey, if you work with any of my clients and questions come up about missing stock basis or about backdoor Roth contributions or about what we actually did with that QCD, I’m your guy. Please reach out. I’m happy to help. And even if they never reach out, you are still going to stand out in their mind as, oh, that’s right. John’s the one who was willing to work with me. He was the one that offered to help if there’s information missing because the tax reporting forms aren’t always super helpful. So John, what else can advisors at large, whether within integrated or outside, and we still got to build these relationships, how are advisors building better relationships with CPAs?

John (19:50):

I think it’s a few things. So givers get, and I think you nailed it, Steven, in that you have to make their lives easy. So creating systems, and we have this fantastic opportunity to create systems like for example, the functionality of some of our financial planning software. It allows the CPA to just go in and access things that would otherwise be a pain in the neck, like 1099. You mentioned those, educating the CPAs. So on our team, we have a gentleman, Richard Austin, who is the trainer of the trainers. He goes in and he goes through the opportunities with tax returns, and we run countless events at integrated to help prepare the CPAs for end of year. You’ve named a lot of the items, but people are thinking about direct indexing. How does it work? How does it benefit us? So the number one complaints, Steven from clients against their advisor are people in the advice business.

(20:54):

And wouldn’t you agree financial advisors are in the advice business as much as accountants are in the advice business. The biggest problem that people have with their advisors, whatever shape that may be, is that they’re not bringing good ideas to the table. So what does that mean? Hey, you know what? Let’s talk about esop, right? Let’s talk about different ways to sell your business. Let’s really get into the granular parts of your transition. Let’s talk about equalizing your estate. Let’s talk about simple mistakes like having insurance held in your estate. Is that going to exacerbate your taxable situation? It could. Let’s talk about the changes in the tax laws. I mean, a lot of people were nervous. We just had an election. Are things going to change? Are things not going to change, but being ready for change and everybody understanding simple things like their necessary estate versus their excess estate, which is something that integrated does so well.

(21:49):

An integrated advisor builds the confidence of their CPA by having the software that can help answer those questions and the technique and word tracks to do that. And then retirement plans, right? Did the person outgrow their retirement plan? Is there a way to save money in their retirement plan? Is there other options like deferred comp? Hey, the times have been pretty good. And then a distribution plan to make sure that we have enough dry powder in case this market that has really had an upward trajectory. Maybe we start to pre-position, but maybe we do that over a certain timeframe because you mentioned it. We don’t want to just sell out one day or we don’t want to be in a situation that we’re locked because of gains. So then creating the budget for tax loss harvesting and creating programs around that to build confidence. That’s really what it’s about. But working with the CPA and being an extension of their practice and operating under their name and helping them gain bandwidth that they might not have already. Steven

Steven (22:52):

And John, as you list all those great things, it makes me think what we call the dishwasher rule, which is the idea that you only get credit for doing the dishes if you’re a significant other sees you do them. And like I said, there’s a great list that you gave there. And I know from working with integrated advisors, you guys are great at making sure the client understands that those things have been done. Because I think where advisors miss the boat sometimes, both with their client communications and definitely with the CPA communications is the advisor will do all these things. They’ll assess all these things, they’ll analyze all these things, and then they just won’t tell anybody because, ah, it’s not applicable. So I’ve got my 42 things I went through. I’m going to tell the client about this one because we can do something about it.

(23:28):

And you need to tell the client about all 42. You need to tell the CPA about all 42. Now, don’t take hours and days of their time giving them endless pontificating on each of those. But you want to make it clear both again, to the client and the CPA, like, Hey, we go through a lot of things Taylor, and these are the ones we’ve prioritized. These are the ones that are most immediate. Well, whatever that looks like. And the reason I say that with the CPA as well is because, and this probably isn’t necessarily a positive, but it’s just the reality. Since CPAs are such a trusted designation, they can kind of get away with just doing the thing they do and not always being totally aware of everything around them. And so I know a lot of CPAs who still don’t really know what a financial advisor is because they’ve never really been required to figure it out.

(24:12):

And so it’s this kind of weird uncertain amalgamation of all these different things. And so as an advisor, whether you’re insourced or sourced or just looking for referral partners, if you can make it clear to the CPAs you work with, here’s how I add value to my clients, it’ll be this light bulb moment for them, for the CPA to say, oh, now it’s not. Hey, if I have something, maybe I guess I’ll call John, it’s geez, I want to introduce people to John because now I understand the sheer breadth of things he’s going to do to take care of these people.

John (24:42):

We have an equation for that. Systems equal comfort. Comfort equals profitability, right? Oh, I love that. So when they really understand what our value proposition is and they’re comfortable with allowing us the opportunity and the trust to work with their clients, and then us showing them a series of little things that add up to a big thing like cash management right now, it’s a big issue. Interest rates going up. I mean, we have a weird time right now. The inflation’s up interest rates are going down, which way do you go? And really even just little things like, Hey, are you using munis? What’s your net after taxes on your cash series of little things that they’re all great reminders that we’re doing our job and that we’re watching over people’s treasure and being thoughtful of their time when we do it because we’re collaborating and making it easy.

Steven (25:36):

John, I love that equation. I’m going to say it again, that systems equals comfort and comfort equals profitability. That’s such a simple way to look at this, and that really is the missing piece for so many advisors. As they look at the CPAs, they know and sit there and think, ah, geez, why don’t I get any referrals from these CPAs? That equation tells you the answer. It’s because they’re not comfortable with what it is you do. And most of the time, it’s not that they know what you do and they think, ah, I don’t like that. It’s that they have no idea what you actually do. And so they’re wildly uncomfortable trying to make that transfer of trust to say to one of their longtime clients who have become their friends, Hey, you should go work with John. I’m not entirely sure what he does.

(26:15):

That’s just not going to happen. And that’s what most advisors experience. They just don’t get those referrals. Whereas if you’ve taken the time to articulate, here’s how we deliver value, here’s this list of things we do for clients, and then the CPA gets to see on the tax return, those things coming through, now they’ve got the proof. It’s not just your word about it. They’re like, oh, John told me these things and then I started getting his client’s tax returns and I can see the incredible work he’s doing. And then you get that comfort that, like you said, turns into profitability because now that CPA is going to say, oh, John’s my guy. I’ve got to send clients to John because he’s really going to take care of them.

John (26:50):

You’re a hundred percent right. It’s building that comfort. It’s building that confidence in our ability to do the job, and it’s having a team behind you that brings up great ideas. We have case studies and white papers that we give our advisors to share with their CPAs. We have weekly training that helps our advisors exchange good ideas led by our case design team and our family office and investment team. It’s a lot of moving parts. So people ask me which part’s most important. Like I said, it’s all of the parts. It’s not just one thing. You need it all.

Steven (27:24):

Yeah, you didn’t sign up to be a financial advisor to do just one thing. Well, John, I really appreciate your time and sharing so much background and insight on all the great things that Integrated Partners is doing, and not just where they started, but where you guys are now. It’s super exciting to hear. So thanks for being here. I really appreciate it.

John (27:38):

Steven. Thanks for having me. This was a lot of fun. And you know what? I think the work that you’re doing is so important and we wish you continued success. We love your podcast. Thank you so much.

Steven (27:48):

I appreciate that. John, as the calendar turns over and we head into 2025 as a listener, as an advisor, this is your chance to really have an intentional approach to how you’re going to work with CPAs this next year to build those relationships, to create better outcomes for your clients. And if as you listen to John, you think, Hey, that sounds exciting. I want to learn more about that. I want to see how I could fit into what Integrated Partners is doing, send me an email at steven@retirementtaxservices.com. I’ll make a personal introduction to John for you. I’ve got his contact information. We’ll make this happen. We’d love to make that introduction because I know so many advisors who are doing great things with Integrated. So to everyone listening, thanks for being here. And until next time, good luck out there. And remember to tip your server, not the IRS.