Read The Transcript Below:

Steven (00:52):

Hello everyone and welcome to the next episode of the Retirement Tech Services podcast, financial Professionals edition. I’m your host, Steven Jarvis, CPA, and as always is a special honor for me, I have another CPA on the show with me this week, Wendy Barlin. Wendy, welcome to the show.

Wendy (01:07):

Thank you, Steven.

Steven (01:08):

Yeah, so excited to have you here to have a great conversation. We’re going to talk about several different things, but you spend a lot of time, you have a lot of experience, not just doing tax work with clients, but helping other firm owners elevate the way they work with their clients. And so the question I want to kick off with is what should a tax advisor be doing for their clients?

Wendy (01:30):

So we hear this word advisory and proactive all the time, but really if you sit back and think about it, do you know any CPAs that are really proactive? Do you know any that actually called you and say, Hey Steve, how are you doing? Haven’t heard from you in a while. What’s going on? I could not imagine any clients saying, I’m leaving my CPA because they call me all that time. And my big plan for CPAs is to have a rotation. I always had a cheat sheet in my car and I would proactively call clients in what would otherwise be dead time driving the kids to school, waiting in line for something. I would call clients proactively and say, Hey Steve, it’s Wendy. Everything’s fine. Just calling to see what’s going on. Why aren’t CPAs doing this? That’s such an easy thing to do. Your calendar reminds you who to call when you last called. So that’s my one biggie. And if your CPA is not doing that, then my guess is they are reactionary. They are waiting for you to call them when you have a notice, when you have a need when something’s urgent. And that’s not the kind of relationship that we want to take into the next 10 or 20 years of our business lives.

Steven (02:43):

So a couple of things come to mind. One, a recent experience bringing on a new taxpayer. One of the questions I always ask prospective clients is, Hey, just give me a little context as to what’s led you to looking for new help on taxes. Because I want to know where they’re coming from and I give very similar themes, but this last taxpayer articulated this way. They said, well, my tax preparer was sending me a 50-page organizer. Well, they just said this 50-page document that they expected me to fill out myself, that seemed like I was doing their job for them. And then the second piece was the tax preparer wasn’t doing anything other than filing the tax return. They gave a specific example. They had a tax return that got audited, which happens from time to time, and this tax preparer had helped them with the return and just kept giving them the runaround.

(03:30):

This taxpayer had to do everything on their own. And they said that the response they would typically get was they would call and they’d say, oh, Wendy on our team is going to help you with that. You’ll hear from her in the next week. She wouldn’t hear anything. And then six months later they’d say, oh, Steven on our team is going to help you. Wendy’s no longer part of our team. You’ll hear from him the next week, six months, and then it was, John is going to anyways, this endless cycle. But those are consistent themes I’m hearing, and I hear this from advisors all the time too. So, Wendy, you said these CPAs exist out there somewhere. How should advisors look for them?

Wendy (04:04):

Yep. I think ask a lot of questions and trust your gut. One of the things you want to ask is how long have your team been with you. Who’s around? Who are my people? And I would also ask for them to put their money where their mouth is on response times. I don’t know if you know, but Delta has a really cool thing where if your luggage doesn’t come out from the hold within 20 minutes, you get a credit, you get your luggage money back. And why aren’t CPAs doing that? Why have we allowed this industry to not hire or staff up enough to be able to return calls in a timely manner? And that means 24 hours. That doesn’t mean in an hour or three hours, 24 hours. I think anyone can reasonably assume that you are going to get your call returned in 24 hours.

(04:50):

And I ask that of any professional I’m dealing with today, financial advisor, doctor, lawyer, I ask, what is your response time? What can I expect and what happens if that is not the case? What’s your guarantee to me that is, isn’t that going to be the case? Because I think we need to put our money where our mouth is. Everybody’s saying, oh, I’m an advisor. I’m proactive, but you really were returning calls within 24 hours. Even if it’s just to say, I’m sorry Steve, I’m not going to get to this today, but I got your message and I’m on it. And relating to the turnover, we all have turnover. It happens, life happens. I’ve lost my best people. Sometimes it’s devastating, but there’s a way to do it and there’s a way to keep ahead of clients always working within a team so they never feel dumped.

Steven (05:42):

There’s some really great insight in there. One of the things I’ve been working really hard with my team on over the last year is that response time. And I like that you made that clarification. I was getting ready to add it. Of that 24 hour response doesn’t necessarily mean 24 hour resolution. I mean, sometimes we’re dealing with complicated issues, sometimes there’s a lot of nuance and detail that needs to be researched, but that doesn’t mean that people should be ignored or just left wondering, well, did Wendy even know that I called or does she care about what I’m doing? And so that’s one that we’ve been working really hard on our team to make sure that people are getting that response time, even if it’s just to let them know, Hey, here’s when we’re going to be able to deal with this for you.

Wendy (06:19):

And there are so many different resources you can use. The best purchase I ever made was a virtual assistant for a $10 an hour. You have someone who will manage your email box, manage the email box for everyone in the firm and simply allocate the work, be the driver. You know how you have a logistics officer for a trucking company? What if we did the same thing? We have a logistics manager, someone who takes all inbound emails, logs them and makes sure that they are responded to in a timely manner. Too often I hear CPAs say, well, that’s the way we’ve always done it. And that’s just like a dagger in my chest. That’s the way we work. We work Saturdays. Why do you work Saturdays? All CPAs work Saturdays. No, they don’t. I haven’t worked Saturdays in 10 years. That’s the silliest thing. And so I really think it’s time for all of us in the financial sphere to step up and say, what are we promising our clients and how can we get them what we’ve promised them? It does not have to be the way it was always done.

Steven (07:19):

All right, I want to make a comment on virtual assistants. Then I’ve got a question for you about getting away from how it’s always been done. I’m totally in agreement with you. Getting someone on your team, a virtual assistant is a great option, but someone who can just help you with all the things that you don’t have to be doing. We’ve had a great experience working with the team at Belay. You can go to belay.com. They do a great job placing virtual assistants. They were at our summit last year. We love working with them. So that’s one potential resource if you’re looking for a virtual assistant. So Wendy, the question I have for you, especially since you made this comment that you haven’t worked on Saturdays in 10 years, which is phenomenal but unique in the CPA landscape. Yes. I’m going to go ahead and bet I haven’t checked this ahead of time with you.

(07:57):

I’m going to go ahead and bet that you charge an above-average fee so that you can have a great team, so that you can have the resources that you can provide value to your clients beyond what’s the norm in the industry. And what I’m seeing is that for people who are serious about getting better help with taxes, they do need to pay more than they would at H and R Block or TurboTax or even some of their local, maybe even regional CPA firms. So for advisors listening to this who are totally committed to helping their clients find better resources, but need to help frame this conversation of you might pay more for this. How do you help people navigate that? And am I right in assuming that you charge an above average fee?

Wendy (08:37):

I would think so, but I don’t even know what average is these days. I’m all about different, the unicorn or whatever it is. And so I think when clients are asking, when they ask me now that I’m not running a CPA firm anymore, people ask me, who do you know? Can you refer me to? And I say to them, it depends how different you’re willing to think because if you want a firm or you’re going to drive up and look for parking or drop off your envelope and have a friendly face meet you at the door, that’s one service provider. There are so many different ways we can get you to what you need. So I always ask people, what is it that you want from your CPA? Just like you and I were talking about when we first meet people and they say, my CPA is no good, my textbook, why are they no good?

(09:25):

What does that mean And what do you want? If you want speedy response time, if you want accurate data, if you want, then there are a lot of remote firms, completely remote firms I can refer you to across this pricing spectrum. It’s not always the most expensive. Sometimes the most expensive is going to be the traditional one where you actually got to pay for parking and coffee and everything else that you’re paying for in their office, right? And the little 75-year-old sweet lady sitting at the desk when you walk in the door. So it’s not always about pricing. I think the question is more about what results do you want? What kind of interaction do you want? If you are not comfortable uploading documents to a secure portal and doing Zoom tax reviews, then don’t do it. No matter what it costs or what your neighbors are doing, find a provider that meets your needs.

Steven (10:17):

I really love that with leading with what the client’s goals are. That makes all the difference. And as we talk to clients, we absolutely lead with the value and the outcome, not the price, not that we hide the price, but you’re exactly right. It’s got to be what does this outcome look like and then how is that different from what you’re currently getting? So I think that’s a great question for advisors to be asking. Especially I hear from advisors all the time that their clients are frustrated with their tax preparer, that they complain about their tax preparer. This gives you an actionable step you can take to say, Hey, what is it you want from your CPA before you start trying to find somebody to refer ’em to?

Wendy (10:52):

And also the definition between tax preparer and tax advisor. There’s so much gray there and people think they’re the same. They’re not. If you go and see someone who says to you, I’m going to prepare your tax return, you have a tax preparer, you pay for the return, you get what you pay for. And they come to me and they go, well, he didn’t give me any advice. Well, did you ask him to be a tax advisor or did you ask him to be a tax preparer because you got what you asked for. You asked for a tax preparer, they quoted you a fee, you got your return, you should be happy. Now if you want advice, now you need to go into the meeting saying, I am looking for a tax advisor who will also file my tax returns for me. That’s a completely different pricing structure, completely different conversation. And so often people are kind of taken aback when I say to them, well, you hired a tax preparer and you got what you paid for. I don’t really understand what your complaint is. If you’d wanted an advisor, you should have asked for an advisor. And then they’re like, oh, well I thought they were the same, but they’re not. It’s a different business model altogether.

Steven (11:55):

I really like that distinction. Looking for a tax advisor who also files your tax return. I don’t know that we articulated that succinctly, but that’s definitely the way we approach it with our clients. We tell our clients all the time, we are not trying to compete with H and R block on who can get the most 1040s done. They’re going to win. We only work with clients who want to have a year-round relationship. But I like that way, and I hope if there are CPAs listening, you take that into consideration. I don’t think you have that sentence trademarked. Please tell me if you do, but a tax advisor who also files your tax return, I really like that.

Wendy (12:27):

And it’s the same for advisors. There are people who go and see an advisor, just invest this money, just invest it for me, do your job. And then there are other people who want to know What about real estate? What about REITs? What about international investments? And again, I will say to clients, are you looking for an advisor or you’re looking for someone to invest your money? Because those are two very different requirements. And so I think unfortunately because of Google and GPT, we have to educate people when we meet with them and set that expectation because unfortunately otherwise it does end up with frustration and miscommunication on both sides.

Commercial (13:05):

Hey advisors, this is Jamie Shilanski from Worlds to Conquer. You may have listened to my podcast over at The Perfect RIA, so you know that I absolutely love learning, but do you know what I don’t love to do? Attend boring webinars. Oh my goodness. And especially the ones that you register for, then keep your browser going because you’re constantly doing other things because the speaker’s not engaging and the content is not relevant. That is why at Retirement Tax Services, they filter their information and content to make sure it is absolutely dynamic for everyone that attends. It’s the number one reason I love going to their power sessions. If you like me, are looking for strategic tips on exactly what you need to do to be a better financial advisor and deliver massive tax planning advice to your clients, then you’ve got to join us. On February 28th, Steven Jarvis is going to have Matthew Jarvis of Jarvis Financial Services attend and he’s going to share with you the 17 things every advisor has to know about qualified contributions. And the best part about it, it’s going to be a hundred percent focused on helping you take actionable advice. All you have to do is register, show up and keep that pen sharp and at the ready to write down all of the notes. So retirement tax services.com to get you registered, make sure that you join this power session. I know for one I’ll be there.

Steven (14:28):

Yeah, that’s a great reminder. It applies to so many things in life that if you are not setting the expectations clearly your clients are going to make up their own expectations and you will never live up to them. Correct. It’s just not possible because the expectations they’re going to make up in their head are basically perfection and endless returns. And so you’ve got to set those expectations clearly so that everyone is set up for success. So Wendy, I know you spend a lot of time with tax firm owners to help them improve how they serve their clients, how they run their business. And as you described to me the approach you take to that, there’s a lot of overlap for business owners in general, especially for professional service business owners like advisors listening to this podcast. So talk about the three, because you boil this down into three critical areas for anyone who wants to improve the service firm they’re running.

Wendy (15:13):

So I bought a firm in 2011 from two retiring CPAs, and I spent 10 years growing that firm and I stumbled and I fell and I cried and I screamed and I even cursed. I had my moments and I came out after 10 years building that firm, I learned a lot. I invested a lot in myself. And what I found that there were three critical areas of my firm when they were running smoothly. Life was good and it was my people, it was my processes and it was my profit. And when CPAs or financial advisors or any professional service firm is frustrated when the owners are frustrated and I go in and I meet with them and I say, tell me what’s going on dollar for donuts. It’s one of those three things. Sometimes all of them where they are stuck, they either don’t have the right people in the right places, or they just don’t even have the right people. They don’t have any systems. They don’t know which are the most profitable clients. There just aren’t any metrics in place. And so those are the three key areas that I focus on with business owners. We drill down into each area, and I actually do it for them because I’m not always the biggest fan of coaching. I find that coaching tells people, finds out what? They never do it. They work around long lists of things to do and nothing ever gets implemented. And so I’m the pushy person that makes sure things get implemented.

Steven (16:46):

So at this point, you’ve really moved beyond just preparing taxes yourself and you work with a lot of other fur motors to just get in and get this done for them. It’s beyond even just the tell you how to do it. I’m just going to do it for you.

Wendy (16:58):

Correct. I come in, I fire the bad people, I rehire you good people, I put your systems in place. And then I run dashboards every Friday for my clients and send them dashboards. And I love it. I was in the trenches for 25 years. I did 25 tax seasons. That’s a lot. That’s a lot. And I learned a lot from it. I love the industry, which is why I haven’t left. And I’m excited about what we can do as an industry, as service providers together moving forward. But I feel like there’s so many CPA firms who are just frustrated and they keep blaming. I hear everyone blaming. There’s not enough people to hire. I can’t find people. Come on. Really? Is that true? That is so not true. You can hire people all over the world. So when I hear that, it doesn’t tell me that I know they’re people to hire. Okay? I hire them every day for my clients. What I do see is people who are scared to make changes, scared to fire the bad people they have. Because what if I don’t find anyone else? And so I think there’s a lot of excuses. It’s excuses the people out there that you can find.

Steven (18:08):

I really appreciate you sharing that, Wendy, because it certainly is challenging as a firm owner myself, I get where people are coming from. But at the end of the day, are you going to take responsibility for what you’ve committed to do as an owner, as a leader, as a partner, whatever your role is, or are you going to let excuses get in the way? And I think there is a huge opportunity. In fact, the opportunity might be bigger because of how many people are leaving the industry to improve your people, your processes, your profits, so that you are running a firm that can go beyond just checking the box on reporting what happened last year and really provide tax advice.

Wendy (18:41):

And the part that’s really interesting about people leaving the profession, that may be true, but there are a bunch of new people coming into the profession that are bringing interesting insights. I have hired teachers. My very best ever employee was actually an ex-mortgage broker who was a genius at spreadsheets. I showed him, taught him how to do QuickBooks. I taught him how to do tax data input. He was my best employee. He didn’t have a fancy license hanging on the door. He hadn’t worked at the big five, any of that. I actually think the people leaving the industry, great, bye-bye. Why? They’re leaving with their old mindsets. And we’ve got new mindsets. We’ve got new blood coming into the industry that want things done differently. And it’s kind of like a restaurant. You go and sit in a restaurant and after 45 minutes, nobody’s even brought me a Diet Coke.

(19:30):

We can’t hire anyone. We just can’t find anyone to hire. And now that’s my problem. And so I feel the same for my clients because people will say, oh, my CPA, he can’t find good people. So yeah, it takes him a week to call us back. How is that your problem? You’re paying good money for tax advice. Why is it your problem that your CPA can’t find good people to hire? That’s simply not true. That is an excuse, that’s an excuse and we’re not going to stand for. There are plenty of people. There are teachers getting out of teaching. There are firemen and policemen leaving the forces looking for career changes. So many opportunities to bring people into your firm.

Steven (20:08):

Wendy, I’m taking notes as we go along for things that I’m going to keep improving on my own team. I love your perspective on this, to be honest. I really love your approach of, Hey, take responsibility for what you’ve committed to do. This is great life advice. Don’t let excuses get in the way. See these things as opportunities, not roadblocks. Just because they’re challenging doesn’t mean they’re impossible, but the opportunities are there. And the other thing, we were talking about this a little bit before we hit record, taxes aren’t going away and they aren’t getting simpler. So we’re recording this inthe end of January. It’s going to release the middle of March. So probably a lot will have changed in the meantime as far as any pending or new tax rule updates. But this happens all the time. Congress loves changing tax rules because people feel impacted by ’em, and people like to vote based on the things that Congress does for them. So tax codes written in pencil, it’s going to change. It’s going to change constantly. Tax complexity and the need for good tax resources is not going away. It just isn’t.

Wendy (21:09):

It just isn’t. And small business and entrepreneurial businesses are the backbone of our country. As you turn on the TV layoffs here, layoffs there, I’m like green. That means more small businesses. I was reading a franchise magazine today of how many millions of franchises opened just in 2023. So the opportunities for advice giving as opposed to tax preparation are huge, but we have to truly do what we say we’re going to do. If you’re going to offer tax advice, then offer tax advice. Don’t say you are going to and just churn clients who leave because they’re not getting what you promised them. No excuses.

Steven (21:46):

That’s a great segue into kind of pulling this back to the audience that listens to this podcast, which is primarily financial advisors because some of you might be listening to this and thinking, okay, great, Steven and Wendy are giving advice to all the other CPAs out there. I hope they listen to this and they change their ways. Well, but let’s focus on what Wendy is saying here. We each need to take responsibility for the services we’re promising our clients. And I’m seeing a large percentage of financial advisors at this point list tax planning in some way on their websites and their marketing materials. But there’s still a big disconnect between, I write taxes on my website somewhere and I’m providing valuable services to my clients. So as a financial advisor, one of your takeaway from this should be, by default, my client’s CPA is probably not providing great tax advice. That’s an opportunity for me to fill that gap. And what are my processes? How are my people going to be involved to make that a reality? We need to see these things as opportunities.

Wendy (22:38):

And I think the biggest buyer actually right now, the mergers and acquisitions, the biggest buyer of CPA firms right now is financial advising firms who are adding the tax component to their business. I am seeing that every day and just be careful what you’re taking on because we don’t want it to backfire. So I think there’s some fantastic planning opportunities there for advisors. And it’s the same business model where I don’t want to see a financial advisor who runs a multimillion dollar firm or even a small firm running around at their kids’ soccer game with their phone in their hand. That tells me that you haven’t hired the people to do the work. So you’re running around with a phone in your hand, and I don’t care what financial service you’re in, we need to get away from that being a business model.

Steven (23:28):

Yeah, I love that. That definitely stands out. I’ve got, my kids are 11 and 13. I definitely notice that when I go to their activities of, wait, who’s paying attention and who’s on their phone the whole time. Yeah. Well, Wendy, for advisors listening, or if we have CPAs listening think, Hey, geez, Wendy’s got some things figured out here. I love to know more about what she does. I mean, how do people follow up with you and what you’re doing? How do advisors, who should they be? What CPAs in their network should they be saying, Hey, you need to get connected with Wendy,

Wendy (23:54):

So you can find me at wendybarlin.com, and if you are looking for CPAs to connect with as Steven, you can reach out to me. My question is always going to be, what are you looking for? Yeah, what are you looking for? What are you looking for in terms of end result by way of relationship? And so come with that answer and then I’ll be happy to find you someone nationwide I can refer you to. I know there are a lot of good people out there, a lot of hardworking CPAs and financial advisors, and we’re all just looking out for our clients. We’re just doing it in different ways.

Steven (24:28):

Yeah. I get requests from advisors all the time of, Hey, who can you refer me to? And I don’t have the same network that you do, Wendy, so I’ll be reaching out to you as well when I get those questions. And it’s not somebody that’s a fit for what we’re doing. So really appreciate you coming on and taking the time to share that insight. Again, keeping in mind that we’re talking to an advisor audience, as you think about 2024 or just planning in general, what are some of those top areas that you’re seeing people who take a proactive approach to being an advisor of areas in their clients’ life that they can have an impact? When it comes to taxes?

Wendy (25:00):

I think make the phone call before the phone call comes to you. Honestly, if you take your top 20% of your clients, just write ’em down, get a list the top 20% and start calling them on a rotational basis, not at the end of the quarter when they’re expecting and not when the market falls. And they’re expecting just on a Thursday afternoon at three o’clock, just put time in your calendar. Do it when you are in the car whenever you can. But I really am a believer in making that phone call when it’s not expected. It’s the same as sending a gift when it’s not. That’s how you get ahead of those relationships to truly be proactive. Start at the top of the list, make your phone call, start again. Even if you just leave a message, they’re going to be so amazed that you called just to say hello, see what’s going on. That’s it. That’s my advice.

Steven (25:48):

I love that. And one of the things I tack onto this every time is you need to make sure you’re getting tax returns from every single client every single year. You’ve got to look at the real data that’s going to give you great context for making some of those phone calls for making sure that you’re staying on top of this and proactive with these things. And as soon as every advisor does this for every one of their clients, every year, I’ll stop staying on the podcast. But until then, it’s going to keep coming back up. Wendy, the last question I’ll ask you is, where are you seeing people find good resources? How do we learn about tax planning we should be doing about tax law changes, about whatever it might be? What are those resources that are valuable for advisors or tax professionals?

Wendy (26:27):

I think our associations usually do a great job. I work a lot with different financial advice associations and they do a lot of work in disseminating really good tax information and just having a network of people. I wrote a blog post the other day about how our network of connections is really so incredibly valuable. I had a client that had just tax disaster on their hands, and rather than go to Google or chat GPT or Instagram, wherever it is that people go these days, I reached out to a connection and I was able to solve the problem within 30 minutes. And so I feel like build your connections, build your team where you share knowledge about what’s going on in the industry, tips and tricks. We are not competitors, we are colleagues. There is plenty of business for everybody. So the more we collaborate and share our knowledge, that’s how we put our best foot forward.

Steven (27:28):

Well, Wendy, I almost feel like I should pay you for that prompt because this is an easy segue to a selfish plug that I’ll make, which is we are hosting our second annual RTS tax planning summit this fall. And if you want a place to make those connections, to build that network of like-minded people who are also focused on tax planning, you need to come to this conference. You need as an advisor, you need to sign up, join us in Phoenix. We’re going to spend a couple of days going, talking about tax planning. We have some bonus sessions about practice management. But getting in the room and making those connections with other people who are focused on the same outcomes that you are will make all the difference. That’s how you’re going to have that list of people that you can call, that you can reach out to. So Wendy, thank you so much for taking the time to come on and share your insight and perspective. I’ve really enjoyed the conversation. 

Wendy (28:13):

You are welcome. Thank you so much. KeHE, my dog, rallying. He totally agrees with you. He’s so excited about the summit. He’s like, me, me, I want to go. Perfect.

Steven (28:20):

We’ll have to figure out the hotel’s. Pet friendly to everyone listening, and thanks for being here. And until next time, good luck out there. And remember to tip your server, not the IRS!