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Category: Compliance · 5 min read

Why you Should be Cautious Talking About Taxes with Clients

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on January 31, 2019

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on January 31, 2019

Professional man talking to two other people in a meeting room

Taxes and death can be complicated, touchy subjects to talk about, but, as a financial professional, you’re likely dealing with both subjects on a regular basis. In fact, you may deal with both in one client meeting, if your clients want to reduce tax liability and protect their family after they pass away.

This is a big responsibility. Your recommendations to your clients should both align with their future financial goals, and take into account the tax implications that they may be faced with down the road.

With tax time around the corner, your clients may be looking to get answers to some tricky tax questions. Each client has a different tax situation, so providing the appropriate answers can get complicated and stressful.  


Know When to Refer Clients

Even with the knowledge of your client’s current financial situation, you shouldn’t assume that makes you the right person to provide them with the tax advice they may need. Navigating the immense and complicated U.S. Tax Code can be arduous. While there are many financial professionals that may feel confident in discussing their clients tax liabilities, that doesn’t necessarily mean they should. 

There are times when acting in your client’s best interest means referring them to someone that specializes in specific areas. For instance, saying to a client “I think you need to talk to someone that specializes in this area” could help you gain credibility as a financial professional that cares about your client and truly wants them to get advice that’s tailored to their needs. 


Consider a Certified Public Accountant (CPA)

When it comes to in-depth or complicated tax questions, it might be a good idea to refer your client to a Certified Public Accountant (CPA). A CPA is an accounting professional that has education and knowledge in many different types of tax scenarios. They also can help create strategies to minimize your clients’ tax burdens. Not only are they required to be state licensed and have specific work experience to be licensed, they’re required to complete continuing professional education, which allows them to stay current on tax changes and trends. They can also provide tax planning advice to your clients throughout the year to help your clients be more prepared for tax time. 

CPAs can also give you the unique opportunity to create a team of professionals that work together to serve the clients’ needs. This can add tremendous value to both your and the CPA’s clients. With this kind of working relationship, you can know what the CPA is doing, what they offer, and the right moment to refer your clients to a CPA, and vice versa.

A great way to make a connection to a CPA in your area is through the Brokers International CPA Alliance Program. This lets you partner with a CPA in your area, and start developing a relationship with them. The bottom line is that sometimes doing what’s best for your client is actually providing them with resources beyond your office, especially when it comes to taxes. 


This information is intended for Financial Professionals who are insurance licensed only. If you are securities licensed, please contact your Broker Dealer for their requirements.

These educational pieces are intended to be informative and provide generalized guidance. They should not be construed as legal advice or provide protection against compliance violations brought on by a consumer or state insurance commission. It is the sole responsibility of the financial professional to seek compliance or legal direction specific to their individual situation. These pieces should be used as a means to raise awareness and evaluate business practices.

For Financial Professional use only, not for use with the general public. #19-0033-012420

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Written By

Jamie Austin

Executive Vice President

Jamie Austin is the Executive Vice President of Brokers International. Jamie has over 20 years of experience in industry operations, and specializes in aligning strategy with organization, vision, and goals. Jamie has spent her career accelerating revenues, improving brand image, and building strong and sustainable sales practices.

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