In a perfect world, you wouldn’t have to question whether or not your financial service providers are really doing what’s best for your long-term wealth management strategy. You’d be able to walk into any advisory firm and trust the person behind the desk to help you create and carry out a comprehensive plan that uses every tool available to you for the best possible outcome—or kindly refer you to someone who can.
Unfortunately, this isn’t the world we live in. The sheer variety of investment products and strategies out there creates specialty areas, and it can be difficult to tell if an individual advisor has the right expertise to help you. Most service models also treat financial planning and tax planning as separate strategies. However, your decisions with your financial advisor ultimately impact the amount you will pay in taxes each year. So how often do your financial advisor and your CPA get together and talk about the opportunities and risks that might be falling through the cracks? If you prepare your own tax returns, can your financial advisor help you take the right deductions for the lowest lifetime tax payment?
As you get closer to retirement and build up a portfolio of savings and investments, tax planning becomes an increasingly important way to save money. But starting early gives you the benefit of time, which can’t be replaced. A Certified Financial PlannerTM with dual certification as a CPA sees both sides of your strategy and can take an integrated, holistic approach to grow your wealth over a lifetime, not just this tax year. Fortunately for our clients, each DHJJ CERTIFIED FINANCIAL PLANNER™ is dual-certified!
Keep reading to learn about more benefits of working with a dual-certified financial advisor and CPA.
See the Big Picture of Your Financial Strategy
Not all of our clients choose to hire a CPA to do their actual tax return preparation, and not everyone needs to. But even if your tax return is error-free to IRS standards, you may still be missing out on deductions that would significantly lower your tax bill if only you knew about them. Working with just a financial advisor or CPA, or even both separately, can mean higher losses over time because nobody is looking at a lifetime strategy that includes tax ramifications of your income, investments, and purchases.
At the most basic level, a dual-certified advisor ensures your money is in the right place and that you’re using it wisely. For instance, they can overlap your tax plan with a charitable giving strategy that fits your budget. Working with a one-stop shop means there is no artificial line drawn between your tax planning and wealth management strategies, and instead of managing the communication between these two different professionals, you can trust your advisor to find innovative solutions.
Build a Better Relationship With Your Financial Advisor
Speaking of communication, it’s easier to develop a long-term, trusting relationship with an advisor who has visibility of your entire strategy. Many CPAs won’t even pick up the phone to talk through the deductions you’re eligible for or help you understand why you owed or received a return for the given amount this year. If your financial advisor is also your CPA, or if you file for yourself and work with someone who’s dual certified, your advisor already has a good understanding of where your assets are, what deductions you might qualify for and what tax strategies will work best at this stage.
At DHJJ Financial, our advisors are also fiduciaries, and we maintain an in-house SEC compliance program.
Secure Your Future
Your wealth management plan is about more than the assets you have in bank accounts, investments, and other financial products. It includes the material and financial resources that will continue to provide for your family for decades to come. Things like your home, estate plan, insurance policies, and college education are all forms of wealth that take on a different kind of value than what we can measure in dollars and cents. As you invest in these things, your financial strategies need to match the level of risk you’re willing to take on. An advisor with insights into tax planning can help you make these investments wisely to avoid surprises later on.
Finally, you don’t have to have much money to benefit from working with a dual-certified financial advisor and CPA. Don’t fall into the trap of letting your money sit in a basic savings account because you’re only in your thirties or get distracted by investments that seem like a good deal right now but may not be the most valuable in the long term. A dual-certified advisor helps you “begin with the end in mind” and take each step of the journey with confidence.