Banking & Finance

Collaborating as advisors to help clients

October 30, 2018
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Erik Schumacher, CPA, a principal at Rehmann’s Grand Rapids office, contributed to this post.

Leading a financially healthy life and ensuring funds are allocated appropriately is not a job for just one person. Utilizing a team of advisors and professionals is the best strategy to ensure all aspects of one’s financial landscape work hand in glove.

When discussing financial planning, it’s important to remember that it’s not about how much a client earns, it’s about how much they keep.

A wealth manager and a tax advisor should be in regular communication to best serve clients and to evaluate how the movements and shifts of one another’s work will impact the client’s complete financial picture. How money is allocated has a direct effect on how taxes are deducted and how best to set up the client for the future.

Having advisors from both sides of the equation at the table results in better sharing of pertinent client financial details, which are needed to inform better decision making. How assets are purchased, how college is paid for, and simply where funds for bills come from are just a few examples of decisions that both types of advisors can help make.

When working with a full team, accountability and responsibility are two traits all parties involved need to demonstrate. The client and each advisor on the team need to understand what information should be shared to create the best possible plan for the client and family. Additionally, it’s critical that all parties hold themselves accountable and continually revisit the plan to uncover hidden opportunities and identify how changing financial trends or new tax rules can impact a client’s financial situation.

Accounting for wealth transfer is a key component in the financial planning strategy to protect and benefit from any circumstance the client faces. Wealth transfer often relates to a client’s future, legacy and how to protect their family. The how-to transfer and, just as importantly, how-to title investments need to be coordinated in tandem with both a wealth and tax advisor. A smooth transfer of wealth to mitigate potential tax penalties will demonstrate the value of an integrated approach.

A holistic approach with tax planning and wealth management also is key in preventing risk and ensuring clients are prepared to handle any challenges they might face. Divorce and litigation are two obstacles where an integrated approach in financial planning is essential. Constant collaboration and preparation from a full team provides active defense and quicker, more effective solutions in trying times.

Furthermore, the proper — or improper — use of investment income can significantly impact their taxes. Taking too much money from an IRA for an asset or as living income, instead of using tax-free bonds, can result in drastic repercussions come tax season.

Collaboration among a strong team is required to accomplish the shared goal of a financially sound future for clients. Fostering a positive relationship with clients starts with fostering a positive relationship among advisors to achieve success for all.