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Educate clients with a year-end financial checkup

Friday, October 26, 2012
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To build the kind of trusted relationships that last, it’s important to meet with clients more than just once a year. If you’re looking for a reason to check in as 2012 winds down, there are a few big issues you could certainly discuss. In fact, now is the perfect time to call up your clients (and prospects too) and offer a year-end “financial checkup.”

Tax cuts set to expire

You’re likely aware, but most taxpayers won’t remember the “payroll tax holiday” that was implemented in 2011, which cut the share workers paid to Social Security by 2 percent and effectively added 2 percent to workers’ weekly take-home pay. That tax cut is set to expire at the end of the year and it doesn’t look like it will be renewed.

In addition, the so-called “Bush tax cuts” are set to expire at the end of 2012, which include cuts to individual income tax, capital gains tax, dividend tax and other taxes.  Congress has yet to reach a budget agreement that addresses the expiration of these tax cuts, and it remains uncertain whether the tax cuts will be allowed to expire or not at the end of this year.

An opportunity for advisors

In light of these uncertainties, it is a perfect time to regroup with clients to ensure they are prepared financially.

  • For clients who aren’t aware of these upcoming tax cut expiration dates, start by educating them on the facts and letting them know that the future of these tax cuts is uncertain.
  • Next, discuss the impact these tax cut expirations will have on their financial plan, using potential scenarios. Both NaviPlan and Profiles software have the ability to run sophisticated scenarios to model for situations like this.
  • Form a game plan for each scenario. There may be tax advantages to taking action (such as taking long-term capital gains in the 2012 tax year rather than waiting, or converting a retirement account to a Roth IRA) or your scenarios may simply help you and your client prepare for 2013. Having a meeting like this to discuss potential scenarios will put your clients at ease, give them an opportunity to ask questions they may have and help your client make informed decisions now, before these cuts expire.
    • Remember, of course, to remind clients that taxes are only one consideration of an overall financial strategy and recommend that they consult with their tax professional before making such changes.
  • For new business purposes, consider calling prospects and asking if they are aware of these pending changes and if they are prepared for the impact on their finances. Ask for a meeting to discuss, and it may lead to a new client.

If you would like to learn more about NaviPlan or Profiles financial planning software, please contact a Zywave representative today at 877-MYZYWAVE or

© 2012 Zywave, Inc. All rights reserved.


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