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Three Ideas for Finding the Best Financial and Tax Planning Advisors

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Understanding the Expertise Gap in Financial Planning and Tax Planning – And Three Ideas for Helping You Find the Advisors You Need

The Expertise Gap

Effective financial planning and tax planning often face an expertise gap.

When it comes to financial planning and tax planning, families and their financial planning issues are not the same. Beyond a small number of core financial planning issues, there can be unique situations that require specialized financial planning and tax planning. And that planning will produce a unique set of solutions. These unique situations can include blended families where estate planning and tax planning need to reflect the different interests of different family members. Or it may involve a family where financial planning needs to address both unusual executive compensation and a spouse with early-onset dementia – or some other “one of a kind” combination of facts and situations. 

All these and innumerable other situations require major changes in how financial planning and tax planning should take place.

The point is that as soon as there is complexity, the ordinary or textbook operating principles of financial planning and tax planning goes out the window.

The ocean of expert knowledge and our own personal oceans of ignorance are both realities. The expertise that you need uniquely is scattered all around. And there’s a good chance you don’t know what it is or where to find it. That’s the source of the expertise gap. Complexity and risk make that gap costly to us, at least potentially.

So if there is complexity, a strong financial planning and tax planning process needs to assemble multiple experts to serve the client effectively. Complexity means that financial planning needs to include attorneys and CPAs, and often additional, different CPAs and attorneys with different specializations. Rounding out that team may require hiring additional third-party consultants, such as trustees or tax planning and tax strategy specialists. When considering the entire legal system governing federal taxes, the rules run into tens of thousands of pages.

Despite the fact that many financial planning issues are shared by most people, the number of possible permutations and “if/then” contingencies is huge. Strong financial planning and tax planning need customization. Collaboration, a "Team of Experts" approach, increases the chances that different experts will add new value to the insights of others.

If you have unique circumstances, complexity, and risk, your openness to accepting the need for multiple experts is a great advantage. It improves the odds that you will make better financial planning and tax planning choices.  Working collaboratively on financial planning with a Team of Experts helps manage risk and preserve the fruits of your lifetime of effort.

Whether it’s medicine, landscape architecture, financial planning, or tax planning, specialized knowledge is critically important. Building a Team of Experts can pay long-term dividends. We do live in an era of specialization and specialized knowledge. If you’re old enough, chances are you know that from experience with doctors and health care. The same principle applies to financial planning. Good financial planning in these situations takes account of the fact that expertise is spread all over the place, and effective financial planning will focus on how to bring that expertise together into a team for the benefit of a client.

Speaking with advisors who are aware of the expertise gap is one good way to assess your next moves in financial planning and tax planning.

Three Ideas for Helping You Find the Advisors You Need

If you're in the process of considering advisors, CPAs, and other experts – even better, if you’re thinking about a Team of Experts, here are three ideas that can help you.

1. Business Owners and High-Net-Worth Families Deserve Nimbleness. 

Life changes and planning needs to change with it. 

Clients deserve advisors who anticipate life’s foreseeable changes and who proactively prepare the client and appropriate changes to the plan. 

But every client’s life is unique, filled with unexpected experiences that neither client nor advisors can predict. For these occurrences, you should seek advisors who have a process for thinking in real-time. Superior advisors will promptly and correctly modify the plan as needed when those changes occur.

One of the most valuable aspects of a strong advisory service is working with a client to correct his or her plan over time – proactively when possible, and promptly when not. Good advising keeps up to date with the client on his/her answer to the question, “What do I want my life to be like?” Because the answer to that question changes. 

Ask your potential advisors about how they take the initiative in these situations.

2   Seek Advisors Who Have Thought Through the "Demographic Revolution."

The likelihood of living to age 100 is increasing with each passing year. This means that lifetime financial planning, as well as multi-generational tax planning and the period of activity as a business owner, are increasing in duration. On the one hand, that presents enormous challenges for trying to ensure that wealth lasts. But on the other hand, it offers enormous opportunities for creative financial planning and tax planning solutions. Look for advisors who can articulate and help implement powerful financial planning strategies for dealing with the financial implications of several generations all living longer. Keeping more money and leaving more money, having a maximum positive impact on the lives of others; all depend on it. 

3   Business Owners and Other High Net Worth Clients Deserve Financial Planning from Advisors Who Embrace Conflict-Free Advice and Who Can Communicate How It's Delivered by the Firm.

Clients deserve advisors who are fiduciaries and who provide conflict-free financial planning and wealth management advice. Fiduciaries are legally obliged to act in the best interest of the client. For what it's worth, brokerage firms and stockbrokers are not fiduciaries. Registered Investment Advisors, or RIAs, are.

The client deserves to be shown that there are no past or present obligations to other firms which could interfere with the giving of conflict-free advice. Ask to be shown this.

A client needs an advisor who will explain upfront how the conflict-free goal is accomplished, or at least, if asked about it, will be able to show how conflict-free financial planning serves the cause of keeping money. That commitment should include an arrangement where your money is held by an independent custodian, not the advisor’s firm.

Interested in a free assessment? Please click here.