5 Simple Steps Framing Financial Plans Around Tax Strategies to Expedite Execution.

• Author: Agamata, Amie
• Position: Financialplanning

While our clients may recognize the importance of their finances, including filing taxes, most tend to procrastinate making financial decisions as they don't feel any sense of urgency. The complexities around the breakeven analysis and net present value in helping our business clients determine what may be in their best interest are second nature to our profession. Similar concepts are applied in the discipline of financial planning as financial planners.

Issues around the time value of money and compound returns are easy. What's not easy is providing clients with a framework to help them through their behavioral finance biases. It's frustrating when we examine what seems like a simple solution, yet estate documents don't get signed or strategies sit on the shelf for years because what's in the client's best interest may be difficult for them to perceive.

1. Paint A Picture

   Use imagery at the end of a fact-finding session to let your client know you hear them, and you have plans to help them. Figure 1 is a tool to use with your clients after an initial fact-finding meeting. You can tie what your client reveals to be important to them to your ability to provide services not linked to a product sale.

   Looking at Figure 1, many advisers tend to focus on the left, which creates an investment portfolio and product placement. CPAs live on the right side: comprehensive financial plan.

   The first step to helping clients move forward and take action is to summarize what they feel they need, the impact you can create through planning and the long-term tax mitigation.

   Financial planning is a natural extension of what many of us do to some degree with our clients as we serve them in a fiduciary capacity. When we examine the financial planning opportunities and related benefits for your clients, there's one field in which most CPAs have a strategic competitive advantage: taxation, which impacts each component of the financial plan.

   Another characteristic is the CPA's service to the business community. The CPA is a thread woven through roughly 6.1 million small-business owners with employees. CPAs are uniquely qualified as a profession due to the clients' best interest being front and center to many client relationships and the notion that financial plans should be built around what's important to each client based on their personal, professional and financial goals.

2. Use Your Strength in Taxation to Convey Benefits

   It's difficult to turn something complex...