The worst idea you can have is to think you can’t do business during the holidays, that financial services marketing is dead. The gentleman who brought me into the business as a stockbroker was a huge success. On the last trading day of December one year, his trades accounted for 4% of the New York Stock Exchange volume. Yes-he had plenty of large clients, but keep him in mind if you think there is no business to do over the holidays.
Year end is the “perfect storm” of concerns if you assist with financial planning and tax planning as so many issues demand attention prior to December 31. Don’t think you’re doing much if you send some 8 page “year end tax planning letter.” Do you really believe people read that stuff?
If you have a financial planning or just a tax practice, you MUST get your clients in to MEET with you this calendar year. It amazes me how many tax professionals devalue their worth by allowing their clients to wait until tax time seeking tax savings ideas. It’s too late by then and you know it. You cannot deliver full value when the year has ended—when the horse has left the barn so to speak. So demand that your tax clients set an appointment in the 4th quarter of each year. Just explain your policy that you meet twice a year—once in the 4th quarter and once during tax season. They will be happy to pay extra when you are able to isolate so many tax saving opportunities before year end. And since tax planning and financial planning often go hand in hand, consider all these ways you can be of value:
Avoid the AMT – the only time to plan for AMT is during the calendar year impacted when payments can be accelerated or delayed. And make sure you indicate your value, “We just saved you $8,000 of alternative minimum tax—do you feel this appointment each year is of value?”
Offset to capital gains incurred earlier in the year. Billions of capital losses are left un-harvested every December 31. Identify the items to be sold for losses and make sure your client takes action (e.g. make a call the last week in December to insure they have acted).
Check the estimated tax payments. Get money paid to hopefully avoid any penalty.
Estate planning — If clients want to start a gifting program, they can give $12,000 per donee in December and another $12,000 on January 1. And since clients will see family over the holidays what better time to mention this.
This is the perfect time of year to attend to estate planning. People travel on planes (and take extra perceived risks) to visit family. These two occurrences make estate planning more important. If you don’t bring it up, they won’t either. So when you meet, you ask: “Will you be traveling this holiday season? Heaven forbid something happens to you. Is your estate organized so that family members would not have heartache sorting out a mess?” Don’t let your clients travel without basic estate planning documents (trust or will or proper titling of assets) and advance directives prepared.
While asking such questions may seem forward or intrusive, you will never help people with the things that really matter unless you ask questions that generate some discomfort.
Of course, there are other year end deadlines and issues to be covered at a year end client meeting, for instance:
• Establishing qualified retirement plans – get paperwork to the administrator/custodian by December 31
• Take mandatory distributions from IRAs, especially the first year when the client turns age 70 ½ to avoid a double distribution the following year
• Attend to items that expire—for example, this is the last year that seniors (people age 70 ½) can give $100,000 to charity directly from their IRA without impacting AGI or other limiting factors on their tax return
• Ask about any financial transactions during the year. You can now undo foolish things that people do during the year. For example, I had a client whose father had died. She was the only heir. The will permitted the executor to get a fee and she received $40,000 for executor services. I told her to reverse that payment. She would get it the money anyway as sole heir and she unknowingly had converted $40,000 of non-taxable income into taxable income. Do your clients ever take actions like this without realizing the impact? Before December 31, you can save them a bundle
Create a checklist of the above items and have each client in for a year end review or do it over the phone. They will appreciate such attention and it’s almost guaranteed that out of these client meeting, additional business will follow in the form of insurance, securities transactions or professional fees. The holiday season may just become your busiest and most lucrative time of year.
Or let them call you. Just send out your invitation to meet with you entitled “Six Things You Must Do Before Traveling over the Holidays.” Every time you meet there’s an opportunity for business.
