Are financial advisors filling your tax advisory role?

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A shift in the financial industry

Tax advisors address an urgent need

A shift in mindset for accountants

A revenue model built on value

There is no doubt the accounting profession is ripe for disruption. If your client’s perception is that your relationship is strictly transactional and solely based on their need to file a tax return each year, you may be putting your livelihood at risk. 

In this episode of Pulse of the Practice, “Tax Planning”, Paul Miller, CPA, from Business by Design, and Mo Arbas, Senior Business Advisory Consultant, Thomson Reuters, discuss the potential for financial advisors to take on strategic tax planning roles — and how accountants can pivot into tax advisory services to address this need and better serve clients.  

A shift in the financial industry

Tax planning is a natural extension of financial services. But consider this: If more financial advisors take an interest in helping their clients with strategic tax planning, how does this impact the accounting profession?  

Typically, financial planners look to work with an accountant to provide insight into their clients’ tax liabilities and areas for potential tax savings. However, with the dawn of AI, financial advisors can simply scan a client’s tax return and receive instant guidance and personalized tax strategies.

With this potential disruption ahead, it’s time for accountants to embrace advisory services using the tools available — and that means a transformative shift in the way we approach our work and serve clients.

Tax advisors address an urgent need

Today’s clients want more knowledge about their tax situation, and the financial services industry is beginning to realize that you don’t need to prepare a client’s tax return to do their tax planning. As accountants, this is a major threat. We must remember that tax touches everything — and many financial advisors do not have broad tax knowledge. Therein lies an opportunity to fill a need.

Tax strategy alongside financial planning is a holistic way to look at our clients’ needs. If your firm solely provides a transactional relationship, your services will be devalued and likely replaced by AI in the near future. However, if you offer tax planning, analysis, strategy and coaching to your clients, your firm not only avoids disruption, but gains a competitive advantage that strengthens client relationships and sets your firm apart.  

By using technology to automate traditional tax compliance work and building in AI-powered tax solutions to support personalized analysis, your firm can engage clients based on the value and experience your firm brings to the table.

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A shift in mindset for accountants

Think about your interactions with clients. If they’ve come to you with a question that goes beyond the scope of their tax return, this is where embracing a tax advisory role comes in handy.  

Fundamental to shift in mindset is recognizing that your knowledge is valuable — and it shouldn’t be given away for free. All too often, firms miss the mark and fail to realize that value is more important than cost. An advisory relationship enables your firm to build trust and provide higher-value services to your clients. It is the path to better meeting their needs, understanding their goals, and developing long-lasting and profitable relationships.  

It’s time for accountants to step into a new role and center their offerings on value, not cost, and make the play for clients’ business beyond this year’s tax filing. Meaningful year-round client relationships reinforce that you are not just a transactional expense, but a committed partner who is there to provide support during tax season and beyond.  

With unique knowledge and personalized support baked into every client engagement, tax advisory services ensure a mutually beneficial experience for your firm and your clients. This creates meaningful insight for them — and long-term growth and revenue opportunities for you. 

A revenue model built on value

Traditionally, the revenue model for accounting firms has been a function of tax returns completed. However, this way of thinking can stifle your relationships with clients and result in missed revenue opportunities.  

As an accountant, your knowledge and expertise are unique and valuable to clients — and you should be compensated appropriately. That’s why the first step to monetizing tax advisory services is cutting ties with hourly billing and shifting to a value pricing model. Value pricing enables your firm to stay transparent, demonstrate value, and eliminate billing surprises.  

Some accountants fear losing clients due to higher fees, but the reality is, clients are willing to pay a premium when they have a clear understanding of the scope of the engagement and the value being provided. 

While the accounting profession may change, a shift to advisory services and new tax advisory roles will keep your firm one step ahead of disruption and on the path to stronger client relationships and sustained revenue. 

Listen to the complete Tax Planning episode of the Pulse of the Practice podcast on your preferred platform.

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