HD Vest Financial Services is introducing a number of enhancements to its 1040 Analyst tool, two months ahead of the IRS tax filing deadline.
The broker-dealer, which supports some 4,500 tax and non-tax professionals who provide financial planning and other services, says the latest version of the tool includes more than 10 planning concepts that advisors can use “in connection with information gleaned from the Form 1040.”
“As we’ve used the tool for about six months, we have noticed — and it’s a bit of a surprise — that it is appealing not just to some advisors and tax professionals. Other financial professionals who do not typically work on returns are gravitating to it,” said Scott Rawlins, managing director of sales for HD Vest, in an interview with ThinkAdvisor.
This interest may be because investors are concerned about the tax implications of their portfolio holdings and other strategic issues.
“When it comes to tax issues, all clients are sensitive to this and are asking [advisors] what their thinking is and how do we best approach this together,” Rawlins explained. “In other words, it’s becoming a practice-management tool to foster holistic conversations between clients and advisors.”
This give and take around 1040 information and financial planning has become clearer to HD Vest in three areas, he says, which is why the broker-dealer enhanced its 1040 Analyst tool.
Fast & Furious
First, the firm wants to enhanced the ability of financial professionals to quickly synthesize data. “They can enter 30 datapoints now versus 14 in the past,” Rawlins stated. “It means they can unlock the power of 60 different conversations with a financial planning focus.”
The tool crunches the numbers very quickly.
“So the advisor or planner can spend 2.5 to 3 minutes [to enter the data] and get compliance-approved information for the client in a report that can be used right then and there,” he explained.
Second, HD Vest sees these conversations as a starting point to more complex, education-focused discussions.
“For instance, an advisor working with a young family that might want to be considering 529 college savings plans can digitally insert information on these plans into the report,” Rawlins said.