HD Vest Reps Add $94M in AUM Thanks to Tax Talks, Tools

The tool’s latest enhancements give advisors the ability not just to look back “but to look forward a bit, too,” he says.

Specifically, the software improvements do the following:

• Enable advisors who are not tax professionals to manually input their clients’ tax form data to yield the customized output through a “snap app” process;
• Identify opportunities for buy-sell life insurance agreements for business owners; and
• Give advisors more ways to help clients take advantage of passive activity losses, follow tax-loss harvesting strategies, determine optimal timing for taking Social Security benefits, and calculate the most advantageous distribution schedule for retirement plan assets.

“With the tool, advisors can take up to 28 data points from tax returns and look at them singularly or in combination with other data points to create a custom opportunity to explore what’s been pulled – regarding a client’s income level, filing status or non-deductible IRA, for instance – so advisors can discuss the parameters of what the clients can do next,” Rawlins said.

As advisors broaden their services, they want to look forward and help clients avoid missteps related to income-tax issues,” Rawlins added.

Example: the 3.8% net investment income tax.

“It’s an additional tax for certain individuals that became effective in January 2013 – and many clients are not aware that it can impact them. Also, advisors may not discuss this with them,” if they aren’t fully informed about it, the broker-dealer executive said. “It could be that clients are paying more than they should be.”

The latest version of the 1040 Analyst let advisors look at income, as well as dividends and interest received. “Then, there can be some talking and planning between client and advisor. Many reps are already taking advantage of this, as are some tax professionals they may be working with,” stressed Rawlins.