make the boom in tax services work for you.
by anthony glomski and russ alan prince
your $5-million high-net-worth practice
tax planning is in very high demand by the wealthy, growing exponentially in importance as you move up the wealth hierarchy.
more: smaller firms can excel as family office practices | trendwatch: new revenues in financial stress testing | become a thought leader | working with the super-rich and single-family offices | the family office model | the new way to get the best clients
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for a large percentage of the super-rich (net worth of $500 million or more) with various private company interests, astute tax planning is the most valuable expertise – far exceeding other services such as investment management.
for the very wealthy, tax planning is so important because results are clearly defined and in many cases, it creates a massive impact for them and their family. you are able to show wealthy clients just how much they save on taxes by using your services. they never know how much their investment portfolios will earn, or lose.
tax specialists are usually external experts
while some of the super-rich and family offices have tax specialists on staff, the majority are inclined to rely on external experts for sophisticated tax advice. their preference to use outside experts is based on them being at the forefront of their field and – while regularly expensive – are a variable cost.
tax specialists can be and often are costly. however, when tax specialists focus on outcomes that are synonymous with the value they provide and not on costs (the fees they charge), the cost discussion usually goes away. the super-rich are willing to pay very well for smart tax advice. moreover, when the discussion is on outcomes, realization rates are usually extremely high.
park city, utah, and long beach, calif., blake christian, a tax cpa and 卡塔尔世界杯常规比赛时间 contributor, always presents his fees in terms of the cost-benefit ratio. “while our firm is generally not the low-cost provider, in the vast majority of client consulting and compliance projects we can provide at least a 5:1 benefit. and the larger the dollars involved, that benefit ratio climbs rapidly. it is difficult to pass up a 400 percent roi.”
the complication is that a large number of “professionals” hold themselves out as tax specialists and many of them are not that proficient. it is not as if most of these professionals are not well-meaning and motivated to do a good job for the exceptionally wealthy, it is just that they are not up to the job.
according to angelo robles, founder, and ceo of the family office association and co-author of “maximizing your single-family office: leveraging the power of outsourcing and stress testing,” “with the growth in the number and the wealth controlled by single-family offices, which is ranging into the trillions of dollars, coupled with their strong interest in legitimately lowering their tax exposures, a large number of supposed experts are lining up to provide advice. while some of them are exceptionally capable, many are not. for those tax professionals who are indeed experts, enormous opportunities are expanding for their services with single-family offices.”
for talented, client-centered tax specialists, the world of the super-rich and family offices has become an ever-greater sensational business opportunity. however, a large number of well-intended professionals trying to approach the super-rich and family offices does not mean they are capable. the super-rich and their family offices are taking extensive steps to screen possible tax specialists. understanding what matters and how they are approaching selecting tax experts is instrumental to you winning the business.
the key to sourcing the super-rich are professional referrals
to benefit from this substantial and growing demand for high-quality tax advice, you need to realize that you and your firm’s tax expertise are table stakes. no one wants to work with second-stringers. being very smart is presumed. the complication is that a great many of the super-rich are incapable of discerning who is a legitimate tax expert and who is a grifter. therefore, they regularly rely on the opinions of professionals they trust.
being referred to the super-rich and family offices looking for tax advice is the most effective way to connect with them. these professionals tend to be wealth managers, bankers, consultants, and lawyers.
there are proven systematic ways you can build powerful relationships with these other professionals, resulting in you being the go-to tax specialist they exclusively refer to their wealthiest clients. all of these approaches are very systematic.
the key to any of these approaches is that you do not concentrate exclusively on your tax expertise. you have to also focus on the self-interests of the referring professionals. these other professionals need to have a good reason to refer you instead of another very talented and capable tax specialist.
being able to do a good job for the super-rich or family office client is critical but not nearly enough. besides, have you ever heard any tax expert say he or she is not going to do a great job for the client? you need to think through how you are going to be able to help the referring professionals achieve their self-interests, which means you need to determine their self-interests.
through skillful questioning coupled with empathy, you can ascertain the self-interest of most anyone. we have found that professionals who can refer you to the super-rich and family offices tend to be concerned about some of the same things:
- how can you make them look good? if this is something you discover, you are well served by methodically reinforcing the value the referring professional provides their super-rich and family office clients. of course, you have to understand what they provide and see it as valuable.
- how can you help them grow their practices? while you can occasionally refer them a client, there are various more effective and consistent ways you can help them become more successful. one example is providing them actionable insights into the world of the extremely wealthy.
- how can you help them become thought leaders? you can help them become the experts the wealthy want to work with by providing them high-quality relevant content and showing them how to leverage the material. done well, this will enable them to garner more clients.
conclusion
the super-rich and family offices make extensive use of tax specialists. the vast majority of them are engaged when their expertise is needed as opposed to being on salary. with the growth in private wealth among these cohorts – even during the covid-19 crisis – the demand for astute tax specialists continues to grow significantly.
in order to work with the super-rich and family offices, you will very likely need to connect with other professionals who can refer you to them. although these other professionals must be confident in your technical prowess, you likely need to show them how referring you is beneficial to them.