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A common question we receive is, "how do I navigate initial client conversations about ways in which their portfolios aren't as tax efficient as they could be?"
It's important to recognize that many tax-efficient investment strategies are relatively new and only now becoming commonplace. Some strategies that have been around for a long time only became available to mass affluent investors relatively recently. How you frame the conversation matters. Consider using one of these three conversation starters:
- "In light of the likelihood of tax reform, are you open to looking for ways to use your investable assets to help minimize your tax burden?"
- "Given the significant growth of your assets over the past few years, it might be beneficial to explore how tax efficiency within your investment portfolio could be impactful."
- "Because your wealth has grown, you now have access to more tax-efficient investment vehicles. We should think about reallocating a portion of your portfolio to be as tax efficient as possible."
Words matter. How you frame the after-tax conversation with clients will determine your success.
Bottom Line: It's never too late to start the after-tax conversation. If left unchecked, taxes can erode portfolio returns, diminish disposable income and impact wealth longevity.
"How you frame the after-tax conversation with clients will determine your success."
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The Firm does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Tax laws are complex and subject to change. Investors should always consult their own legal or tax professional for information concerning their individual situation.
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