A Team of Coordinated Professionals Is Your Clients' Best Bet

by Bill Angelo, Attorney at Law
Denkewalter and Angelo

Picture a symphony’s worth of classical musicians all trying to play a piece in perfect harmony, but they can’t see one another. Each of them also has slightly different sheet music. It doesn’t take a stretch of the imagination to know it’s not going to sound pretty.

That’s what it’s like for clients whose various advisors don’t communicate. Of course, an individual’s wealth management strategy doesn’t come from just one part of their approach, but rather a comprehensive and holistic combination of the efforts of several professionals.

A little miscommunication goes a long way

You might be surprised to consider just how often disjointed planning and advising can impact a client’s long-term financial well-being. Estate planning attorneys, CPAs, financial advisors, and insurance agents may have access to the same initial set of client documents or client goals. But, once isolated strategies created by each of those advisors are in place, things can begin to go sideways. On the other hand, a quick recap among a client’s advisors is often all it takes to smooth over any issues and develop a great, integrated plan for clients.

Put yourself in your clients’ shoes

Consider the situation of a typical client — let’s call her Dana. Dana is a successful IT manager with a rich family life and a very busy schedule. Even though free time is hard to come by, she’s decided it’s time to stop putting off financial and estate planning. Here are a few of the advisors she’ll likely meet with in order to get started:

  1. Insurance agent: Dana realizes that in order to make sure her spouse and children will be well taken care of when she passes away, she’ll need to put a robust life insurance policy in place. If her insurance agent isn’t in communication with Dana’s estate planning attorney, the beneficiaries designated in her policy won’t coordinate with or support her estate plan.
  2. CPA: From marriage and dependents to new types of deductions, Dana decides it’s time to employ an accountant rather than do her taxes through a rudimentary online system. Her new CPA takes stock of all of her financial assets and may learn about something that didn’t come up in Dana’s communication with her insurance agent.
  3. Financial advisor: Dana’s financial advisor helps her determine what types of investments are smart choices for her and coaches her in establishing long-term financial goals. Everything in her financial plan seems perfectly organized. But, as a result of creating this financial plan, the amounts of insurance in Dana’s policy may no longer be optimal.
  4. Estate planning attorney: Dana finds a local estate planning attorney to implement a trust-based estate plan that names people she trusts to make decisions if she can no longer make them, ensures her assets will pass to those she intends, and avoids or eliminates as many costs and taxes as possible. Without good communication and collaboration between her team, her estate planning sessions could seem like a reinvention of the wheel — eating up more of Dana’s time than she and her family care for. But there are serious implications down the road as well, as Dana now has four sets of siloed information.

Without collaboration between these specific professionals, she does not realize these discrepancies herself. It might not become clear that anything is wrong until complex and stressful situations arise that bring problems to the surface.

A little communication goes a long way, too

Even a 20-minute round-table discussion may be all that’s needed in order to share a quick rundown of pertinent details and determine if any further action is needed to make Dana’s various plans fit together.

In addition to finding problems that can be easily resolved now, they may also notice missed opportunities that could benefit Dana and her family for years to come. When opportunities to benefit clients are discovered, it’s only a matter of time before each of these professionals receives referrals from Dana’s colleagues and friends.

For example, Dana’s financial advisor and CPA might recognize that she has several low basis assets. They notify her estate planning attorney, who suggests she add a charitable remainder trust and an irrevocable life insurance trust to diversify her portfolio at a lower tax cost. Her life insurance agent then implements a policy for the ILIT that essentially replaces the value of the now donated asset in the charitable remainder trust.

On the other hand, let’s say Dana doesn’t have charitable goals and she’s comfortable holding onto a specific asset instead. With no immediate need to diversify the portfolio or divest the asset, a community property trust might provide a significant income tax savings after her death. By extension, the community property trust will improve the availability of assets for her surviving spouse (and, of course, those assets will need management by the financial advisor). These are just two examples of ways that a little communication and collaboration can yield amazing results for clients.

Bring your clients’ estate planning attorneys into the loop

The goal of every advisory professional is to put their clients in the best possible position to achieve their aims. And collaboration with estate planning attorneys is a fantastic strategy to have at your disposal. When we work together as a coordinated team, we’re strengthening our own practices as well as the chances for highly positive outcomes for our clients. Get in touch with us today to discuss how we can benefit our mutual clients.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.

Sam McElroy, PsyD, NSSA

Sam McElroy, PsyD, NSSA

As a managing principal of financial services brokerages Sam has always made every effort to go a step beyond your typical financial advisory firm by utilizing “client focused” discovery, planning, and implementation processes aimed at creating tailored solutions for both businesses and individuals. In addition to traditional planning concepts, Sam has focused on the development of a practical, "natural consequences," based approach to customizing effective solutions on an individual basis. Sam McElroy graduated from Hampton University, magna cum laude, and holds several financial licenses. In addition to co-founding @financial and @financial Investments, Sam also acts as a business consultant and holds a Doctorate in Psychology. Sam has always placed a large value on community involvement as well as education and has been the recipient of several Humanitarian and Achievement awards. Sam has also contributed research examining social dynamics and methods for optimizing cooperation and efficiency in team, group, and work settings, as is currently exploring unique insights with respect to the psychology of personal finance.

Tad Cook, NSSA

Tad Cook, NSSA

Tad Cook is partner of @financial and @financial Investments, and is instrumental in its management and daily operations.  In addition to his focus on sales and marketing, Tad oversees the cultivation and management of the firms investment strategies and portfolio management.  Prior to joining @financial, Tad built a professional practice through the Hoopis Group at Northwestern Mutual.  Tad is a National Social Security Advisor, certified by the National Social Security Association, which oversees the certification of advisors specializing in Social Security planning.  Prior to joining @Financial, Tad spent 23 years in corporate sales and sales management with several consumer product manufacturers, and 10 years selling residential real estate in the Chicago area. Tad is a fully-licensed Financial Advisor working in Investments; Retirement Planning; Insurance; College Planning; Business Services; and Estate Planning.

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