RTS #042 No dumb questions

Asking great questions is essential to great planning. There are absolute dumb questions you can ask as an advisor (that’s a whole separate topic), but you want to create an environment where your clients feel like they can ask any questions, particularly the ones they might self-label as “stupid questions.”

Taxes are complicated and confusing, and for most taxpayers they have never had an opportunity to really learn how they work. But because there is so much talk about DIY on this topic that people tell themselves they should already know it all. How you respond when those questions come up will dictate whether they ask the next question and whether they ask the really important questions.

I start nearly all of my responses with “That’s a great question” or “That’s a question we get all the time; you’re not alone.” It usually takes me just a minute or two to provide some quick tax education, but it does wonders for the client’s confidence and comfort with the work we are doing together.

The best questions typically come when you don’t try and make the prompt overly technical. Instead of asking how a client’s tax situation has changed, which makes it seem like they should have a specific answer for you and understand the tax rules associated, I ask, “Is there anything top of mind on taxes before I dive in”? Sometimes, the answers I get have nothing to do with taxes, but I get to take care of whatever is top of mind for them so it doesn’t distract from the rest of the meeting.

Tax planning value absolutely comes from real tax savings, but there is also value in providing education and peace of mind. Asking great questions and giving your clients a space to ask their questions can lead to both of those outcomes.

What can you do about it?

Make sure you are giving your clients a place to ask questions. Whatever your preferred format for clients sending in questions, make sure it’s clear to them how that process works and how quickly and effectively you respond. This will set the precedence for how much your clients feel comfortable asking questions. The great news is that “quickly” does not have to be the same time for every advisor as long as you clearly set the expectations with the client so they aren’t disappointed with the response time.

Telling a client they’ll have an answer next Wednesday and then delivering it on Tuesday (if even that’s a full week away) is a much better client experience than leaving the timeline open-ended and getting back to it in 24 hours. If you don’t set expectations, your clients will make up their own, and you will never live up to them.

Happy Tax Planning!

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The tax code is 80,000+ pages and Google has 875,000,000 results when you search “Tax Planning”, so each week we are going to help you wade through all of that noise and get to the Relevant Tax Stuff.