Tax & Estate Planning
“Will you please help me with my tax return?“ used to be the only thing new clients would ask James Frazier when he started out as a CPA. But preparing tax returns is more of a dessert than the main course now that he’s transitioned his Ohio-based tax business into a full-service advisory firm.
But are tax services an add-on for firms that are deeply rooted in accounting? That’s been Frazier’s plan. In the three decades since becoming a CPA, Frazier’s firm has evolved along with his clients’ increased financial needs. Frazier’s Financial Advisors is now a wealth management firm that happens to also prepare tax returns.
What you can learn: Taxes are a recurring topic for RIAs to handle, even when they’re not tax professionals. Frazier offers tax advice for advisors on the lookout for new clients. Frazier Financial Advisors is also a case study for advisors looking to logically add services as clients’ needs and wealth expand.
James Frazier, Managing Director, Frazier Financial Advisors
Be patient as you expand your tax skills
The shift from accountant to wealth planner has been a long one for Frazier. Thirty years ago, working as an auditor with large companies, he saw many executives’ personal tax needs go unmet. He decided to make a shift. Frazier earned his master’s in taxation with the goal of providing personalized tax service for individuals.
That was the first step. As clients looked to Frazier as more of financial advisor than just a “tax guy,” he earned his Certified Financial Planner designation and hired people with planning backgrounds into the firm. That included his son Joshua, a CFA charterholder, who joined the firm in 2007.
Now the firm can build a broader view of clients’ needs and add additional value that clients can benefit more from. Frazier says many of his competitors don’t have the same ability — at least not under one roof — to provide tax and wealth planning. Some have tax professionals in house, but Frazier’s clients can get tax help from their primary investor advisor, too, who are given income-tax training, Frazier says. There are also three members of the firm dedicated to tax issues.
The results have been profound. While 10 years ago, most clients came looking for tax help, now most new clients are primarily looking for broader financial advice. The firm now has 300 clients and assets under management of $300 million.
How RIAs can add value with taxes
RIAs who aren’t tax professionals will still need to refer clients. But advisors can still add value without giving advice by reminding clients of several tax tenets, including:
How to plug in with CPAs
While advisors can make tax-aware decisions, many still need strong relationships with CPAs. Advisors who aren’t tax professionals can create partnerships with CPAs so clients get a more integrated experience. CPAs, too, can be a powerful source of referrals of new clients.
In Frazier’s experience, the best way for RIAs to connect with CPAs and forge a stronger relationship with them is by carefully handling cost basis information. This doesn’t just mean providing tax professionals with a year-end summary of long and short-term gains. RIAs should communicate with clients’ CPAs during the year about moves they’re making or planning to make.
Frazier knows he’s doing something right when clients tell him they appreciate how he marries smart investment management with tax consideration. Clients tell him: “We understand you can do all of this.” That’s actually what he wants to hear.
Tax & Estate Planning