Getting a full picture of your client’s financial situation is critically important In financial advisory and often one of the biggest challenges. Tax data delivered straight from the IRS with your client’s consent can help advisory firms overcome this challenge by illuminating what’s really happening in their clients’ financial lives.
We’ll start by examining three ways in which tax filings can create opportunities to learn more about a client’s real financial situation and provide better advice, while generating revenue opportunities for your business.
Responsive AI has integrated IRS tax updates and aggregated banking data into our Prioritize dashboard for financial advisors. Each of the following scenarios arise out of advisors having access to this data.
Sandra Johnson recently submitted a new Form W2: Wage and Tax Statement to the IRS signifying that she’s had a job change. According to tax rules, Sandra’s financial advisor knows there is a 60-day window to seize the opportunity to roll over her 401K to an IRA. The advisor reaches out to Sandra in a timely manner to see what she wants to do. Even if she doesn’t want to do the roll over, there’s still opportunity to have a relevant conversation with Sandra and discuss other held away assets. The result: Sandra gets time-sensitive advice and her advisor either increases Assets Under Management (AUM) and/or has an opportunity to learn more about their client.
Bill Fowler’s advisor learns that he has recently sold small business assets in a Personal Income Tax (Form 1040) filing with the IRS. Bill gets a call from his advisor to discuss how he wants to invest the proceeds of the recent sale. This gives Bill’s advisor an opportunity to develop a long-term plan for selling other assets and investing the proceeds. The result is a win-win: Bill gets timely advice and his advisor gets an opportunity to increase AUM based on money in motion.
Jordan Fatherhood’s recently sold home is picked up by his advisor on a capital gains declaration on Schedule B of Form 1040. If Jordan and his partner haven’t purchased a new home yet, then the advisor can open up a conversation on planning. If they’ve downsized, then there are likely surplus assets to potentially invest. Again, Jordan’s advisor gets a heads up about a money-in-motion event that facilitates better advice for their client and an opportunity to grow the practice.
Up-to-date tax information can be used to deliver more targeted, better advice for your clients and ultimately increase the value of the advisory services you provide.
Few information sources available to financial advisors are more reliable than tax data because it’s not in the interest of most people to lie to tax authorities. This creates a solid foundation – a ground truth - on which to build a data-driven wealth advisory strategy that can deliver the following benefits to firms and their advisors:
For more information about how Responsive AI delivers actionable insights to advisors, contact the sales team for a live demo.