While preparing his income tax return on TurboTax this week, a client called because he owed more than expected and wanted to know why. Over the phone, we reviewed the TurboTax online questionnaire and determined what caused the higher tax bill. We then reduced it by electing credits he hadn’t considered. HighTower-Scannell Wealth offers proactive tax planning for our clients, but we are not in the tax preparation business. My advice to most clients is that TurboTax is a great tool, but they should consult with their CPA because these professional accountants know and understand the law. Paying for objective advice from a CPA is a good investment because it usually saves money.
The next day, while discussing estate planning alternatives with a client, I was asked, “Should I go online to draft a will rather than pay an attorney?” I recommend that clients work with a licensed attorney to help implement an estate plan because they have seen and worked on the problems created when estate planning documents are not prepared properly. When clients need a will, trust, power of attorney, living will or other planning documents, an online questionnaire will not address all of the issues that need to be considered. Fees paid to an attorney for valuable expertise will protect your family when you are gone.
These questions became apparent today as I read the article “Robo-Advisor growth hits Wall Street” in Yahoo Sports. The journalist addressed the growth of online “advisors” who offer low cost, technology- based investment management services some believe may replace working with advisors like me. Online firms are successfully leveraging technology to drive down the cost to invest and improve expense transparency, both of which are good for clients. We’ve used robo-advisor-type services in our practice to deliver low cost and transparency to our clients, lowering our client fees 5 times since 2007 while passing along efficiencies to those we serve.
Beyond the cost savings and transparency improvements, can these online companies truly replace the human touch of advisors? I remember watching an online tutorial about Walleye fishing before leaving for my first fishing trip in Canada. It was informative, but it did not compare with the coaching I received from the fishing guide in the boat on the water. He directed me toward the different strategies and equipment needed for the catch as the weather changed on the lake.
I know my clients’ stories, priorities, history, goals and families, and I didn’t discover that by reviewing online surveys. I’m there when clients face unexpected life events, job changes, promotions, or medical emergencies. I offer advice when they are saving for college, planning for weddings or evaluating the overwhelming alternatives facing their elderly parents. We gather “robo-advisor” financial facts, but it’s the emotional data we gather in personal meetings that allows us to prepare, implement, and monitor comprehensive plans addressing taxes, retirement, cash flow, budgeting, estate planning, insurance and other needs.
Your goals and dreams change. Financial products do not. Clients work with us because we don’t sell products – we create customized plans based on each client’s unique goals, and we continuously reevaluate client plans to ensure they are aligned with changing needs. Our clients rely on us to protect their futures, and we take their trust to heart.
Tim Scannell, CPA, CFP TM provides Personal and Business Tax Planning, Estate Planning, Investment Management, and Generational Wealth management to his clients. “Clients work with us because we don’t sell products – we create customized plans based on each client’s unique goals, and we continuously reevaluate client plans to ensure they are aligned with changing needs. Our clients rely on us to protect their futures, and we take their trust to heart.