By CPA Trendlines Research
High-income clients generally tend to know how to deal with money, but their finances are complicated. They should consider the counsel of their accountant and financial advisor.
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Here are 10 ways to both demonstrate your value and help them protect and grow their wealth.
1. Tax Planning Is Year-Round, Not Year-End: Remind them that the biggest savings don’t come in April. They come from strategies we implement throughout the year.
2. Your Tax Bracket Creates Opportunities: If they’re unaware, point out that because of their income level, they’re in a higher marginal tax bracket. They should explore tax-efficient investments and deductions.
3. Retirement Planning Isn’t Just About Saving: Suggest that high earners often phase out of traditional retirement benefits. Offer advanced tools like defined benefit plans, backdoor Roth IRAs and cash balance plans.
4. Charitable Giving Can Be Strategic: There are benefits to giving back some of what the client has received from society. There are charity options that reduce taxes through donor-advised funds, appreciated stock donations or qualified charitable distributions.
5. Diversification Protects Wealth: Portfolio balance is especially important when there are large amounts of money involved. Help clients understand where concentrated stock positions, equity comp or business ownership create risk.
6. Estate Planning Is Essential, Not Optional: Tell the client that because of the size of their estate, they need to plan for tax efficiency, trusts and legacy goals now – before exemption rules change.
7. Insurance Is Part of Wealth Management: High earners need tailored life, disability and liability coverage to protect both income and assets. Offer options.
8. Cash Flow Needs Structure: Even with high income, unmanaged spending or inconsistent cash flow can cause strain. Remind them that you can help with sophisticated budgeting and cash management.
9. You’re a Target for the IRS: High earners face more IRS scrutiny – accurate reporting, documentation and proactive planning are critical.
10. Your Legacy Is More Than Money: Explain how you can help plan not only for wealth transfer but also for values, philanthropy and family governance.
How you phrase your advice should be determined by how much the client already knows. If some of these tips are too obvious, broach them at a deeper level. Your counsel will be received better if specific to the client’s financial situation.