Ep. 19 | Implementing Financial Planning Into A Tax Practice
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Intro:Everybody, and
John Tripolsky:Hey, everybody, and welcome back to the Mr. R Show brought to you by the MRR Institute. As always, we work pretty hard here, I should say really hard, to get some great content in front of you. Of course, you do get that free CPE for joining us here on this one, so be sure to follow the link in the show notes wherever you're listening to this. And you won't really wanna hear too much from me on this one, so I'm gonna let our two guests and, of course, my cohost, Chris Pacquero, run with this one.
John Tripolsky:And one more thing. Right? Congratulations again for surviving the new year. Here you are back in 2025. You got through the first month.
John Tripolsky:Now we're in the second one. Sure your year is off to a great one. So without further ado, I'm gonna hand the mic over to my cohost, Chris Pacquero, and he will introduce the topic as well as the guests on this show today.
Chris Picciurro:Well, thanks, John, and welcome back everyone to the Mr. R Show. We're excited to have you. If you're driving in your vehicle or sitting at your desk, walking, jogging, whatever you're doing, welcome back. We are going to talk about because one of the things that I'm passionate about is making sure that we're helping our clients with as many things as we can to add as much value to our clients' lives that we can and also to be able to monetize all of the training and education, relationships, and all the things we bring to the table for our clients.
Chris Picciurro:So we have seen a trend over the last decade, especially, of CPAs, enrolled agents, and some other tax professionals entering the world of financial advising and having what we call a a dual practice. So we have two amazing guests this this episode. I'm just gonna say for myself, I've been head of late I've been a licensed financial adviser for about nineteen years. It's been incorporated into our tax practice, and I've done a lot of different things with it. But I'm so excited to have the guests we have today to have two fresh perspectives because guess what?
Chris Picciurro:Y'all are sick of hearing about my my trials and tribulations. So welcome to amazing CPAs. I have a lot of communication with. I feel like they've become friends. Scott Nelson and Trey Junkins.
Chris Picciurro:Welcome, guys. How are you doing?
Trey Junkins:Very good. Thank you. Thanks for having us on.
Trey Junkins:Doing good, Chris. Thanks for having us.
Chris Picciurro:Awesome. Well, we're gonna start with Scott. Scott's located in Southwest Florida. Scott, can you tell us a little bit about your your practice, a little bit about yourself, and how you chose to, first of all, get into accounting and then get into financial advising?
Trey Junkins:Yeah. Okay. Sure. So funny thing is, getting into accounting, after serving in the air force and then getting my degree in finance, I thought for sure what I wanted to do is become a financial adviser. However, while I was finishing that degree, I worked for a few retail banks who completely discouraged me from staying on in that direction.
Scott T. Nelson:I wanted to be a trusted adviser, and I felt like the big banks were taking everything that the word trust means and sweeping it out the door. Kinda felt more like a used salesman. If you notice, you know, you go into any bank and you can't make it even up to the teller window before three people have come up and tried to offer you a financial review or a credit card or something else. So then after I finished my studies and I actually finished my master's degree, I I I really wasn't certain which direction I wanted to go. Do I wanna go with financial adviser or, accountant?
Scott T. Nelson:And I applied in both fields. But as you know, in both fields, you usually need experience to get hired, but you need to get hired to get experience. So it it was kind of that tricky, where am I gonna go? It was hard to find a position. And then I finally got an offer from two different firms on in the same week, and one was to become a financial adviser and the other was to become an accountant.
Scott T. Nelson:And I had the weekend to choose. I thought back about those banking days, and I became an accountant.
Chris Picciurro:No. I would argue they made the right choice because it's much easier to go from accounting and add financial advising than a financial advisor trying to learn how to be a CPA or tax professional. So
Scott T. Nelson:Exactly. So I actually I felt like it was the best path that I could have gone down because after becoming an accountant, getting my CPA credential, going out on my own, starting my own firm, I I had this you know, the resources of of clients, of of the cash flow coming in to be able to cover my, you know, my living expenses and not feeling like that adviser that has to call every single telephone number in the phone book, you know, so to speak, and accept every client that even considers taking your service, I can be very selective in of of who I service because I don't need the clients. I want them. And if I don't want them, I'm not taking them, which really puts, I think, us as CPAs or even other, you know, EAs or, you know, somebody who is already a trusted adviser to their clients. You just added another layer of service that you can provide from somebody that they already trust.
Scott T. Nelson:So it was a really, really simple segue that you know, in that respect. So to say a little bit about my practice, I'm here in Southwest Florida. My office is in Bonita Springs, which is dead center between Fort Myers and Naples. I'm probably, I'd say, 50 to 60% accounting services and 40% climbing towards that 50% in investment advisory services. The way that my that my advisory side works, I keep the two separate in the sense of I've got two different business cards so that I'm not crossing any regulatory lines when I am explaining what I'm offering or sending emails out to clients.
Scott T. Nelson:I keep it separate. I work I I partner with a wealth management company that I rented space from as a CPA firm for several years before I started working with them so that I knew that I could trust them because anybody who's in this realm knows that every financial adviser out there wants to partner with the CPA so that you'll refer clients back to them and you won't refer their clients to somebody else for financial advisory services. So you have to be careful of who you refer to because it's a reflection a lot of times on yourself. You refer something over and then it turns out sour and it, you know, backfires on on, you know, you as a person even though you didn't do any of the work, so to speak.
Chris Picciurro:Right. No. And you nailed it. Right. Because you've got the as a CPA or as a tax professional, you have you're you know, I and and I I can't remember where I heard this, but other than you're basically, you know, someone's number two adviser in their life as far as trust next to their primary care physician.
Chris Picciurro:They trust us, most of our clients, implicitly and with take responsibility for us. We take that very seriously. So it you said you're choosing you know, you could be a particular with the financial advising clients, and here's the great thing. You already done their tax work. You've already worked with them.
Chris Picciurro:You already kinda know their income. You might not know their entire balance sheet, but as an experienced tax professional, you can get your head around that. And one of the kind of the the cool things about having financial advising is, and I'm gonna bounce on and ask Trey what
Trey Junkins:he thinks about this is is that, you know, I should really keep track of
Chris Picciurro:this one year, but I swear about 75% of my interactions with clients could lead to more revenue. When the clients come to you with a question, like, I'm thinking about selling this property. I have a you know, I think think about those on this property. I wanted to do a $10.31 exchange. I bought it.
Chris Picciurro:I have a a friend right now who bought it. I'm not gonna get into too many deals. I bought it, you know, x amount of years ago. It's tripled in price. I'm sick of being a landlord.
Chris Picciurro:Hey. You could still do a $10.31 exchange into a syndication and just I want mailbox money. I don't wanna be a landlord anymore, but I really don't need the cash, and I just want mailbox money in in in bam. So now on the tax side of it, hey. If you do the ten thirty one if you don't do the ten thirty one, you sell.
Chris Picciurro:Here's your tax burden. But if you do the ten thirty one, this is what you, you know, this is where you're at. And if you need help, you know, finding that replacement property, let me turn you on to some other resources. So that always feels good. And then, Trey, obviously, the most important thing we have in common other than being CPAs is we're both diehard Detroit Tiger fans.
Chris Picciurro:That goes without saying as number one.
Trey Junkins:That's right. That's right. It does. This is a good good time to be gloating in that. We just need a couple more signings here before the, for the spring ball starts.
Chris Picciurro:We do. We do need a little more depth. We can't we can't little travel baseball our way through the playoffs anymore with one stud pitcher and a bunch of guys coming out of the outfield. But, anyway, yeah, Trey Jonkins, I tell us about your practice and, you know, how you got started picking accounting and and why you wanted to get into financial advising.
Trey Junkins:No. Absolutely.
Trey Junkins:I I wish I had a a little bit more of exciting story of of why accounting, but it it just got oddly struck me as as an interesting and something I excelled at pretty early on. Even when I was in high school, you know, my my high school that I went to offered an accounting class for, you know, upperclassmen that they could take, and I got the opportunity to take that earlier than most and did great and did some dual enrollment at the local community college, took a couple of college classes while I was in high school. And it just kinda it's just one of those things that that that clicked. And, you know, I didn't really have anything else pulling at my mind and at my heartstrings from a career per perspective. So I decided to pursue that.
Trey Junkins:And so went to school locally at Western Michigan University. You know, my practice and my home for my life has been Southwest Michigan, so not nearly as as sunny and warm as some of us on on today's show. When I turned on my car this morning, it's like negative six. So that's a step, in the right direction. Yeah.
Trey Junkins:But all all kidding aside, you know, I started my firm when I was still in college, and it was a side hustle. I graduated with my accounting degree. I started working actually at a local financial institution in their accounting department, kinda moved up the ranks there, you know, at a pretty decent pace. And then I actually got a job, the a large corporation, a a Fortune one fifty company here in Southwest Michigan and worked in their corporate controllers group for about six and a half years. And I had my firm on the side that whole time, but I was not actively trying to grow it.
Trey Junkins:You know, it was natural to, you know, few tax returns every year, mostly friends and family to start. It would grow a little bit every year and, you know, every once in a while, get a new bookkeeping client, something along those lines. But it was, you know, it was it was play money. It was it was, you know, not not meant to pay the bills per se. But then over my years of working in the corporate world, I I I slowly just, you know, had that had that epiphany.
Trey Junkins:You know? Like, you know, working with small businesses, with the mom and pops, with individuals talking about taxes and tax planning, that that tend to fill my bucket, you know, a lot more than than working in in the corporate world. And I say that saying I had great experiences in the corporate you know, I don't speak ill about that. They treated me great, and and that's an awesome career path. But it just it just wasn't you know, I I I could I found out it wasn't what's gonna, you know, fill me up for the rest of my life.
Trey Junkins:So Right. With that being said, I took a few years and really poured into poured into my business, JW accounting. And just, you know, a couple years ago, I ripped the Band Aid off of the full time job and said, listen. I'm either gonna give this a try, and I'm gonna sink or swim. And so, luckily, so far, it's been been swimming, and we're doing we're doing really well.
Trey Junkins:So And and as far as financial advising, I know that you we're gonna talk about different tactics, but just a 30,000 foot view, you've you've merged within
Chris Picciurro:a financial advisory practice. Is that in which I've done I went through the same experience. I know we talked about that on, a little bit too. But, yeah, can you tell us about that decision and how, you know of course, you're not gonna say it's going all terribly, but just kinda what went into the decision and why you why you wanted to move forward with that.
Trey Junkins:Yeah. Absolutely. So up until actually, j up until this month, JW accounting is offered, you know, what I would call stereotypical accounting and tax services, right, tax preparation, tax planning, bookkeeping, payroll, all that type of stuff. But we do have or we did have a very key strategic business partner for our to refer clients back and forth with for financial advising, wealth management, things of that nature. And I would say over the past, you know, twelve to eighteen months, we just started to have conversations of going, you know, is there sound good business reasons why we should not, you know, formalize a partnership and really start working working together on a closer basis.
Trey Junkins:And just after having those conversations, we decided, yeah, it probably does make a lot of sense. And and to be truthful, you know, obviously, when you do something like this, there's gonna be a lot of, you know, referrals and sharing your clients on both side in both directions. Right? And that's the goal because we're we're trying to all grow together, and so we're always gonna be referring back and forth. But from a strategic standpoint, we're really, in the early parts of this merger, really focusing on the wealth management clients, introducing tax planning to their preexisting client base and going, you know, from a from a conversational piece, it's been more, hey.
Trey Junkins:You know, if we are if if the financial advisers and the wealth management advisers are going to do our job to the best of our ability, taxes is is is, you know, probably gonna be the biggest expense that's going to, you know, eat away at your wealth creation and your wealth management. So we need to make sure that we are looking at this, planning for this, talking about taxes. This can't be on the back burner anymore. And so we're gonna you know, we're bringing in and we're merging with with CPAs to help us proactively do that for you. And so that's been the early on, I would say, focus from a conversational piece is is more so going to their side.
Trey Junkins:But like I said, there's definitely gonna be plenty of, you know, clients that we've been servicing before that we can introduce to the wealth management side of the business too.
Chris Picciurro:Well, I feel like a lot of tax professionals are the the facto financial adviser for their clients even though they're not getting paid to do it.
Trey Junkins:Sure.
Chris Picciurro:You know, they get asked a lot of questions. And you both share office space with a financial adviser. We used to share office space, and I almost feel like it's it's it's like that girl next door that you you used to, like, you know, play tag with. And then all of a sudden, you come home from college, and she's just like, not the girl next door anymore. You're like, wait a second here.
Chris Picciurro:Maybe I should be dating this girl. I don't know. You know? And and because it's like, gosh. We we we have so many things in common, and yet we could we could really be a good synergy.
Chris Picciurro:And and I know, especially when I was first starting out, I mean, before tax cuts and jobs act, when you itemize your deductions, you'd always see on those miscellaneous itemized deductions, tax prep fee, and financial advisory fee. And I was and it hit me when I was in my late twenties. Okay. Yeah. Make your joke, John, many years ago, two decades ago now.
Chris Picciurro:A little over two decades ago now. And, gosh. You know, my charge was $400, and they paid $5,000, you know, to a financial advisor. And who are they coming? And the financial advisor's emailing me and calling me for half the crap that they're supposed to be doing, like Roth conversion numbers and this and then help with capital gain harvesting or capital loss.
Chris Picciurro:Why don't I embrace my role and say, okay. Let me let me help clients with that. And and that's one of the reasons that led me to to kinda walk into it. Just so and you mentioned something, Trey, introducing a tax planning. I I wanna get your feedback because I have my number I have my number written down.
Chris Picciurro:I'll reveal in a minute. But for clients that have done any type of tax planning, and I'll start with Scott back to Scott, what percent of the time does that do you find opportunities to to help them with financial advisory or when when I say financial advisory, I'm gonna include life insurance planning and maybe, you know, in in those sort of things. But what percent of the time when you sit down with someone or talk to someone about a tax plan, are you feeling like there's other opportunities to help them out and and and quite frankly monetize that?
Scott T. Nelson:I mean, honestly, probably a % of the time, there's always something I mean, there I I guess you can't say a % because there's always that one time where you're sitting down and that person has done everything perfect their whole life and they have everything. And that's like the unicorn. You know? Right. But every once in a while, you run into that person.
Scott T. Nelson:They've just done everything by the book their whole life. And that's 99.9%, not everybody else. So there's always always some sort of opportunity. Now are they willing to act on those opportunities? Now that percentage drops down quite substantially, where then I'd say maybe it's a, you know, 70% or greater chance that you sit down to do a financial plan or a tax plan with somebody, and there is an opportunity to do something more in in the advisory or financial advisory side of it.
Chris Picciurro:It could even be like a tax plan and someone it benefits them to be an s corp, and now we can we can help process payroll, either do it hands on or use a third party referral source and and and implement a solo k. You know, there's just so many things you could potentially do. How about you, Trey? I know you guys are stepping into this quite a bit too.
Trey Junkins:Sure. Sure. I mean, from a percentage standpoint, yeah, it's it's gotta be high. We're playing the game, so I feel like I don't wanna cop out and not put a number out here for this conversation. I'm gonna say I'll go 80%.
Trey Junkins:Maybe that's maybe maybe I'm a little lower than what you guys are saying. I do think though, all kidding aside, you know, it's certainly more conversations than not. Right? That there is something that can either be executed, planned, discussed, talked about, you know, benefits. There's there's no doubt about it.
Trey Junkins:And what Scott just referenced to when you get down to the, you know, the nuts and bolts of it is you can lay out the plan. Are they going to execute it? Does the client wanna execute it? I will tell you for for me, you know, it's not use usually, it's not a do the clients want to execute it. It's can they execute it because cash is king, you know, for for a vast majority of of either tax opportunities or plans or even for investments.
Trey Junkins:Right? I mean, cash is gonna be needed in some capacity, you know, a majority of the time. So that's that's usually where, you know, the conversation, you know, where the rubber meets the road is, hey. We can
Chris Picciurro:do this.
Trey Junkins:We can do a solo. We can do a, you know, just the list goes on and on as far as opportunities are concerned, but we're gonna have some cash to do that. And that's one of the many, many areas where having a more, hands on relationship with the advisor with the with the financial advisor helps. Right? We're gonna need cash to do this.
Trey Junkins:Where do they where is all their cash currently at? What can you know, what is there anything we can do to move that around? Do we need to liquidate? But what kind of tax results is that gonna be? Well, then they throw that back in my department, you know, to talk about that.
Trey Junkins:So there's a lot of back and forth. I'd actually like to piggyback on the trailer what Trey just said as far as sort of those different opportunities and what you
Scott T. Nelson:can do with it going back and forth with the adviser side or the tax planning side where I actually I'm gonna I'm gonna steal a line from Chris here, and I've actually used it quite often lately is that we're more of a client's board of directors. And that, you know, the investment adviser, the estate planning attorney, the CPA or EA or whoever's doing, you know, the tax planning or tax preparation. You know? We we shouldn't be making all of the decisions for a client. Instead, we, you know, to quote Chris there, we are their members of the board of directors.
Scott T. Nelson:They're we're providing them sound advice, and and then it's up to them to take that advice or not. Not. And we if if we pretend to be a master of all trades, we, you know, we become moderate at any of them, and we only need to have those specializations that we can, you know, really dive into to provide our clients that real sound advice.
Chris Picciurro:Right. Right. So I I forgot to mention this. 80% was my number I wrote down for opportune when you do a tax plan that people are gonna implement. That's just my own my own thought on it.
Chris Picciurro:And you're right. I mean, the clients want your help too. Like, ultimately, from a client perspective, right, if you're charging one per you know, let's say you're charging 1% management fee, we're gonna talk about that in a little bit. If you've got a CPA involved and a financial advisor involved, you're getting two people on your team. You're getting the tax part of it as just part of that or or if you're running a fee based practice.
Chris Picciurro:So, yeah, there's a there's a lot of synergies there. It's it's like peanut butter and jelly, really. So so let's talk about okay. You know, I'll ask Scott first or, actually, I'll ask Trey first since you kinda recently did it. What are the and what are the first steps as far as being able to offer the service?
Chris Picciurro:You know, there is some licensing requirement. This is a very highly regulated industry. It can be a little annoying at times. But Sure. We know that those are those safeguards are out there to protect us.
Chris Picciurro:What what what's the first step? And what what did you go go through to to be able to offer this and to be able to be to be able to be compensated for your work?
Trey Junkins:Yeah. Absolutely. Absolutely. So I wanna be just preface all my comments with, obviously, you know, I wasn't, was not on the wealth management side of things before all of this started. So, I don't wanna get too wild and start speaking terms that, may or may not be wildly accurate here, but I will at least speak to it from my side of the fence.
Trey Junkins:There was a there was a lot of coordination that needed to take place. The the firm that we merged with, I can tell they they were affiliate of a, obviously, a very, very large, you know, national wealth management firm. And so there was a lot of, you know, our staff and our team had to go through the entire onboarding process, you know, through through that firm, go through all the background checks, go through all the registrations, everything, you know, that any other employee that would have been hired by their firm even before even before the merger. If they were just hiring a new hire to bring on their team, my whole team had to go through that process to to make sure that everything was okay. And then, you know, from a technical standpoint, there are certainly limitations on who can have access to what type of documentation and access to what systems, right, and who can see what and and all of that.
Trey Junkins:So we've had to walk that, you know, walk that tightrope. The way that we're still functioning and, again, this is very, very new and fresh for us, so I'm not saying this is how it can be forever. But the way that the way that, you know, both companies and both stabs of both companies are working right now at this, you know, brand new, you know, with this merger is we're still working in in silos from the standpoint of no one on my team is gonna log in to the the wealth management, platform and look at what type of investments, you know, someone has or anything like that. No one on the the wealth management team is logging in to, you know, we use Canopy. We you know, no one's logging in to our Canopy account and looking at so and so's tax returns for the last three or four years.
Trey Junkins:Right? It's still siloed and segmented from from that regard. So so, yeah, that's that's the long winded answer just to say, you know, it's it's still very much so separate from a who can see what, who can do what, who, you know, all that type of stuff. But from a client facing perspective, we are doing a very good job, I think, and we're being very purposeful on coming together or presenting together. We're talking together.
Trey Junkins:You know, everything looks, you know, together when we're meeting with people and we're client facing.
Chris Picciurro:Now, Scott, I no. Vegas. Scott, on your end, did are you what licenses are did you do you have do you have a life insurance license or health insurance license or also? Or are you I'm
Scott T. Nelson:currently doing the insurance license with Florida because I can't speak, you know, on annuities or life insurance or anything like that in in until I am, and not because I I I actually don't have a care to ever provide either of those, products. And mostly just because of the tight rope that we have to walk as CPAs doing the right ethical thing. So I try to stay away from anything that has a commission because, you know, not just in fact, but in appearance. So, you know, if you offer two different annuities or two different life insurances and one pays a higher commission, but the the but maybe that one is the better, but slightly, what's gonna happen if something happens to that person and then their errors are looking at what you did? And I just and I'm not saying that you can't because they're you know, you obviously can sell these products.
Scott T. Nelson:You just have to, you know, really walk that slippery rope, and then that rope becomes even thinner as a CPA. Yeah. So for that license, I'm the only reason I'm even getting that one is just so that I can legally speak to it without crossing that line and having to bring in one of the, you know, annuity experts or, you know, whatever else. But I as far as licensing goes, I do I went out and I got my series 65 so that I could become investment advisory representative. I'm enrolled with, you know, the the PFP section of the AICPA to be able to get all those resources.
Scott T. Nelson:And I started going through the PFS certification program to have that as well. So then as far as licensing, that's where I am. I've got, you know, the CPA license, and I've got the series 65.
Chris Picciurro:I was thinking about it pre that. So we're gonna talk about compensation in a minute, but but we'll dovetail into that is thinking about your relationship in the financial advising process. Right? Because I look at it like this is just my own way of looking at it. I always feel like there's there's kinda like four tiers.
Chris Picciurro:Right? There's the the first tier is and we I'm I'm a tax professional, but I'm also a financial adviser, and I'm the one filling out the paperwork. I'm the one finding third party prop I'm a one man or one woman band. I key I I need commission. I get I keep.
Chris Picciurro:I might have staff. I might have to pay a broker dealer, but I'm not splitting it up with anyone. Then you might have the second situation where there is a revenue sharing or there's a partnership of some type. I'm the go to person. I'm their financial adviser, but I'm also really working with a whole another team of people if that makes sense.
Chris Picciurro:That's, like, that's second. And then the third would be, I'm on the team, but I'm not your go to guy or girl. I'm I'm getting compensated because I'm a financial advisor. I'm part of the team. But if if someone calls in with a beneficiary change, I'm not their person.
Chris Picciurro:I'm not you know? And then the fourth would be I'm licensed me with a broker dealer, and I have a solicitor's agreement with somebody that and and I'm getting paid over commission or some type of revenue share, but I'm not involved in anything. All you know, day to day. I'm and those are out there too, the solicitor agreement. So going from basically, you know, a referrals, you know, referral source, no day to day to I'm doing everything.
Chris Picciurro:I know you guys are kinda that spectrum of because if you're listening to this, you're either already doing financial advisory or you're thinking about bringing it onto you into your practice. And there's no wrong or right answer. It's just what you're comfortable with.
Scott T. Nelson:Right. Yeah. So I'd say I'm I'm probably and mostly because I I didn't fully understand what you were saying for what number two tier was, but I think I was somewhere between two and three. Like, kind of a mix in there. Because if for advisory for investment advisory services, if the if a client calls in and they're my client for investment advisory, they are going to call the wealth management company's telephone number, and the receptionist is going to pick up.
Scott T. Nelson:And depending on what it is that they're asking for, they're either going to get me because they'll say, oh, I need to speak with Scott because I'm thinking about this investment. I wanna get his opinion or, you know, whatever it might be. Or if they say, you know, I'm calling in and, I changed my bank account. I need to make sure that my retirement account is connected to the new account. They're going to push it over to somebody on our team that that's what they do, and they work 100% on, you know, for the wealth management company.
Scott T. Nelson:So I'm I'm I'm kind of, you know, I'm kinda swimming in both both sides there.
Chris Picciurro:Yeah. That I didn't explain it properly. I guess my way would thought my my thought might be the the most hands on approach is you are conducting every meeting, you're in every meeting, and you're implementing things very hands on. The second one would be you're in the meetings, but you're not necessarily executing the plans. The third one, which that's kinda where I'm at is I might be in that discovery or that initial meeting.
Chris Picciurro:I'm brought in on any tax related matters, but I'm not in the quarterly or annual reviews. I'm not I'm not in any of those meetings unless there's plus I need to be, but by default, I'm not. And then the fourth one is I'm not in any meetings. I basically make an introduction. I get a solicitor's fee.
Chris Picciurro:Again, all this has to be legal and ethical. That's why you have compliance departments. That's why you have there's a lot of red tape we have to go through in in that in a bad way. So I'm kinda in that third example where I would make the introduction. I might be in the discovery meeting, but I'm not in the quarterly or annual review meetings unless it's specifically regarding taxes.
Chris Picciurro:And I think, Trey, it sounds like you might be in that realm ish. I'm not sure your involvement on that. So
Trey Junkins:Yeah. Yeah. And the way you're describing it, I would say so. You know? And, again, this is all new to us, but the way that things are kinda working out right now is, you know, let's just pretend for the sake of conversation that, you know, a a new prospect or or a new client walks through the doors of our wealth management firm.
Scott T. Nelson:Right?
Trey Junkins:Hey. We'd like to meet, sit down with a wealth you know, an adviser. We were referred by so and so. You know? That's great.
Trey Junkins:That's wonderful, and we have support and admin staff. Set that all up. The the the financial adviser may sit down that very first meeting, you know, for an introductory. How'd you get to know us? Here's a little bit about our firm.
Trey Junkins:Here's about, you know, our investment philosophy, all those type of things. But during that meeting, we they are definitely having a discussion now saying, hey. You know, just so you know, we have, you know, CPAs on staff who help specifically with tax planning, tax preparation, you know, all the way down the list of every the all the all the off all the services we offer. Depending on how the client receives that, I'm I am likely brought in that very next meeting
Chris Picciurro:at that point.
Trey Junkins:Unless they say, oh, no. My, you know, my my brother has done my taxes for thirty years. We're not changing it. You know, obviously, there's there's circumstances. But if they show interest as, oh, that would be really great, love to at least meet with somebody, put a face to the name, talk to them about what that might look like.
Trey Junkins:I'm usually brought in during that during that second conversation. On an ongoing basis, though, let's say let's say that prospect then says, yeah. It sounds great. We'd love to use, you know, your firm, and we'd like to use all of your services, wealth management and tax combined. We wanna use everything.
Trey Junkins:That's awesome. Right now, I am probably at least I at least have one meeting a year where it's myself, the wealth management adviser, and the client that's sitting down together. Whatever we execute or wherever we decide to execute, I may or may not be the person that that does it or, you know, I probably oversee it, make sure it does get done. But I I am gonna sit down, you know, at least probably once to twice a year with with everyone just to and and for us, it's do we have to structure it that way? Maybe, maybe not.
Trey Junkins:But it's a relationship, you know, especially for new clients that we're trying to build relationships with. It's it's just something that we've prioritized making happen.
Chris Picciurro:And you're gonna, yeah, you're gonna adjust as things go on. I'm thinking, you know, and and you might have a tiered you might have a tiered offering. And that's gonna go into my next question as far as if you're the people listening to this again, they might be financial advisers already. A lot of people listening probably are just interested in bringing financial advisory into their practice compensation wise. So just like in the tax where there's a variety of things.
Chris Picciurro:You know, there are there are certain things that are that you're gonna earn a commission on. There are but then there there are certain things that are gonna be an AUM or assets under management. That's kinda like a subscription. That's a quarterly fee or a you know, some people charge quarterly, monthly for whatever assets are being managed. And then there's some fee only advisors where basically they charge a flat fee.
Chris Picciurro:And typically, you know, that could be quarterly or or what have you to build the plan, maintain a plan. And then if you implement things, there could be additional revenue sources. So just kinda talking through that. Do you have any thoughts on what you're Scott, for your client base and what you're what you're what you're seeing out there is is becoming more popular and and and, you know, there I mean, there's certain things that they're just commissionable products. That's just the way we're paid if you're a financial adviser on it.
Chris Picciurro:And and as long as we disclose these things, there's nothing you know, do you expect people to sell your your house for free? No. This isn't they're gonna be compensated.
Scott T. Nelson:Right.
Chris Picciurro:So what do you think in your practice that people prefer? I imagine not to not to paint a a loose not to make assumptions, but I would imagine that in Southwest Florida, you have a very mature aged population, probably people more in that maintenance mode, maybe the distribution mode of their season of their life.
Scott T. Nelson:Yet But, you know, I don't know. So the majority of the clients that, you know, I'm seeing and and and I and I guess I have to rewind from our our last question now that I understand it a little better. I'm more of the one two because I'm I'm sitting in in I'm doing the quarterly service meetings. I'm I go out and I I I speak at seminars and then clients or potential prospects come back and they book a prospect meeting. I sit with them.
Scott T. Nelson:I did that today. I also then I'll put together a proposal, but I don't put the proposal together all by myself. That's what, the wealth management team. They, you know, are are picking the strategy. And then I'm going over it with the client.
Scott T. Nelson:I'm looking at it, you know, behind the scenes as well, but I'm not the one that's sitting in front of the computer looking at all the tickers and the candlesticks, the alright. Buy, sell, buy, sell time. But then I'm meeting with them for quarterly service meetings when it comes to the advisory. And a big part of it, of course, segues into this next question is what's the fee? Because, you know, the the like you said, down here in Southwest Florida, a large number of the clients I'd say almost all of my clients are retired as far as on the wealth management side.
Scott T. Nelson:However, being in Southwest Florida and it's an affluent market place, everybody from up north that has money moves down here at least part of the year, and then they head back. You know, we don't have changing seasons, you know, as far as, like, the, the fall leads. We have the changing colors of license plates that show up in in the winter. But so with that, it's not just service, though. What we find quite a bit is you have a lot of people that retire early, which opens up a lot of planning opportunities because if, you know, they retired in the early sixties or late fifties and they're not taking Social Security yet, they don't have to take those required minimum distributions yet.
Scott T. Nelson:Looking at it from a tax perspective, we're going, okay. Look. You've got 90% of everything in a traditional IRA or a four zero one k, and you've got 5% in this brokerage account and another 5% in your Roth or, you know, whatever the blend is. And they're looking at, how do I get more into that Roth? And from a financial planning or a tax planning standpoint, that's where coming in and going, okay.
Scott T. Nelson:Can you survive off of savings for a year or two? Because on your tax return, you look like you're in poverty. And then you can then convert quite a bit into that Roth without jumping past the 12 or 20% tax bracket all the way up until you're forced to take Social Security, and then the provisional income comes in, so it pushes it up a little bit. And then the RMDs come in, and then it becomes very difficult to do those conversions without doing it at very high tax rates. So the sweet spot is when and that's where my my proposal meeting that was this morning came in as they were in their sixties, and that's exactly what we were looking at.
Scott T. Nelson:And that's where if, you know, somebody's listening to this podcast and they're thinking about getting into this area, it's really where if you have that tax experience, you can really excel and lend your expertise to the area because you think in a way that you know? Look. There are CFPs out there in this office. We have CFPs, and and they know about tax. You know?
Scott T. Nelson:And and they're tax minded. But the majority of investment advisers are are are not CFPs, and they're not tax minded. They they might be good at at investing, but they're not thinking about what the tax implication may or may not be or what tax plan they blew up by restructuring the investment portfolio in November or December and not relaying that information over to the accountant so that they make sure that, you know, the proper estimates are paid. So oh, but then to to answer your your your driving question there, though, is we're assets under management. It's a percentage.
Scott T. Nelson:That's how we're that's how we're being at it. No commissions unless it's those insurance products and the, the percentage is kinda tiered like, tax brackets. You know? If it because you can't charge I joke about this all the time. If I could get somebody with $25,000,000 to let me fee bay or, you know, percentage base them at the same amount as somebody with 1,000,000, that'd be fantastic.
Scott T. Nelson:But their somebody has $25,000,000 isn't gonna be stupid enough to do that. So
Chris Picciurro:Right. You
Scott T. Nelson:gotta, you know, it's gotta be percentage, you know, incremental steps. And on the other side of it, you're doing a lot of work for somebody that if they have a hundred or a 50,000, that that percentage has gotta be higher because the amount of work that you're putting into somebody with a hundred and $50,000 isn't going to be all that different than somebody who has a million dollars.
Chris Picciurro:Well, it's actually tough for you know, a lot of times people say, well, I have min you know, I have minimums to work with people, and I'm one of these pea like, I would would love to help everyone, but it it it does kinda protect yourself because if someone has a hundred thousand dollars and they lose a thousand, that's that's more significant than, you know, someone with $2,000,000 that loses $50.
Scott T. Nelson:Right.
Chris Picciurro:It's just that that's a big you know, that then it gets and then they get a little jumpy too. So for you, it's interesting because in your situation, you've got some very complicated financial plans. But on paper, these early retirees probably have a pretty straightforward tax return. They aren't sky we've got a couple of rentals, but they don't have probably s corps coming out of their ying ying and and all this where, like, Jay, I wanna hear about your kinda your avatars too because we'll have people you know, when we we didn't have a lot of mature aged people as clients. We had a lot of people that owned businesses.
Chris Picciurro:So for us, we were really heavy on the tax prep side, you know, when didn't have as many assets under management. But if we can maybe implement an employer sponsored retirement plan or something like that, we could maybe get them there. But, Trey, what are your typical clients looking like now?
Trey Junkins:Sure. Sure. And I'll say that, you know, out of all the things during this whole merger process that we've gone through, this is by far the topic that we have talked the most about.
Chris Picciurro:Good.
Trey Junkins:You know, what do we do with clients who are you know, I'll use air quotes. No one can see me because this is just, you know, there's no video on this podcast. But, you know, my my fingers are up with air quotes of, you know, investment poor but planning rich clients. Sure. Right?
Trey Junkins:Maybe those are people who are just starting on their investment journey, but they do have, you know, two businesses, three businesses, four rental property. You know, you name it. Right? How do how do we make sure we're capturing our value and charging appropriately? So I'll say all that just to say it's a work in progress for us.
Trey Junkins:I I will tell you I I don't have a problem sharing with everyone what we're starting with, but I guarantee it will change, as we get, more clients and just get more situations. You know, the the wealth management firm that I merged with, they they're AUM. So that, you know, it's it's pretty, you know, pretty typical and pretty straightforward. So they have a fee, percentage fee that they have, you know, charged historically for their services. So what we've what we're doing is we're saying, okay.
Trey Junkins:If we if we talk to a a a client that is already using the wealth management services and they wanna add on tax services, we're gonna go from this fee to this fee. So we do have kind of a a set percentage, so to speak, but their AUM number is gonna determine the level of services that they're getting. So if their AUM is between and these are not our exact numbers, but I just wanna give a picture here for people. If if if their AUM, let's say, is under a hundred thousand, we might not even allow them to we we might not even give them the option to bill through their investment account. Like, they they just might get an invoice straight from us just like we have always done historically for our clients
Chris Picciurro:Mhmm.
Trey Junkins:Through our system.
Chris Picciurro:Right.
Trey Junkins:Let's say they have AUM between a hundred thousand and 300,000. Well, we we can charge you this new percentage rate that we're gonna charge all of our joint service clients at, but you're gonna get tax prep only. You're not gonna get proactive planning.
Chris Picciurro:Right.
Trey Junkins:Right? And then maybe if they're between, you know, a 300,000 and a million, then they're still gonna get charged that per same percentage. But because their AUM, you know, meets those qualifications, then they would get what we would call tax planning services throughout the year. So we're tiering it like that to start knowing that there's gonna be some, you know, some probably some modifications to that along the way.
Chris Picciurro:And that's coming. I think about the the hospitality industry, you know, and look at pretty much every major hotel brand has tiered membership pricing. You know, you could be of Gold Plenum in in the gold member the Plenum people get the, you know, the free room upgrade. They get a 50% bonus. There's just certain benefits based on how many nights you stayed in their in their properties.
Chris Picciurro:So that's kinda your AOM. And and I think coming up with packages and making sure that you're not doing 50 doing some 50 different ways for for different clients. And you're gonna and and you're right. It's gonna change because clients are gonna, you know, they're gonna be in that asset accumulation stage or and I and just kinda talking about this, like, you gotta look at the client. Some clients are, like, really p and l heavy, meaning they've got a lot of tax preparation.
Chris Picciurro:They've got a lot of stuff going on, but their balance sheet isn't good. But, Skye, your clients might be really great balance sheets, but but they don't really have a lot going on on their p and l. Right? They might just say, hey. I've got a and put their questions might be different, like, should I, hey.
Chris Picciurro:Should I pay down my my mortgage? Okay. Okay. You know? And but for the client doesn't understand, there's a big difference between is the money sent in savings doing nothing?
Chris Picciurro:Is it in a brokerage account triggering your capital gain? Is it in a retirement account? Is it in a Roth? So that's where as CPAs or tax professionals, we have that insight to understand what someone's asking and understanding the tax ramifications of their decisions where a lot of the bigger brokerages too, they they specifically say, we do not give tax advice. Like, we are I wanna end on one interesting question.
Chris Picciurro:It just popped in my head because I because I've I've been licensed for, like, nineteen years as well, and I do a I get a lot of referrals from other financial advisers. And at the beginning, I was worried that that would hinder me from working with other financial advisers on with their clients if I was just doing the tax planning and strategy and tax prep. Have you experienced any other financial advisers kinda push back on you at all or or any advice for someone that's kind of concerned about that that's thinking about getting into tax or financial advising?
Trey Junkins:Yeah. I'll answer that first, Chris. So I was pretty purposeful. And, you know, once once we decided that this this merger was gonna take place, I was I was very purposeful in reaching out to a few of the, you know, key financial advisors that I still share mutual clients with from a from a tax, you know, in the tax service side of the business. Those conversations went went fine.
Trey Junkins:Right? I mean, there there was some there was some natural hesitation with some, but it it was totally justified in my opinion. I get that. Right? They they wanna make sure that our relationship is professional.
Trey Junkins:It's strong, that they don't refer someone over to us to do, you know, to do some tax work for them, and then we're we're, you know, slipping them through the proverbial backdoor to go talk to our, you know, wealth management guys. You know?
Chris Picciurro:We Right.
Trey Junkins:Our gals. We, you know, we can do better returns and this and that. And, you know, in my heart and in my you know, that that was that's never how this was going to be to begin with. But it was important to be proactive and and have those those conversations with with folks. And I know that the advisers that I merged with on on the wealth management side, you know, to be totally transparent, I don't think that they probably had as many strong relationships with CPAs.
Trey Junkins:Certainly, they have clients that use other CPAs for prep. But as far as a a proactive working, you know, relationship, I don't think there was a lot there. So they weren't as concerned or in tune with that as as as I was, but it it was definitely conversations that were important and critical to have up front.
Chris Picciurro:Yeah. Nip that in the bud. Scott, how about yourself?
Scott T. Nelson:Yeah. So I've been very transparent about it with adviser investment advisers and also accountants because sometimes I'm one side or the other because I do keep them separate. And whenever I'm working with somebody who and I I run into this quite a bit because I'm in Southwest Florida. A lot of my clients are here for half of the year, and they're in another state for another half of the year. And I tell them right up front when they say, yeah.
Scott T. Nelson:You know, I I wanna start working with you as my financial adviser. Do I have to to do tax prep and tax planning with you? And I tell them right away, no. You don't. You can keep your your current accountant.
Scott T. Nelson:That's fine. I'll be happy to, jump on a phone call with them and, put their mind at ease that, I wanted to do another tax return like I want to, staple the back of my hand. You know? You know, I would prefer that they key especially, you know, for my my clients that are New York or Pennsylvania, or Ohio that, you know, those those state returns that I just, you know, don't care to get into too much. I've done them.
Scott T. Nelson:I've done quite a few of them. But, you know, I I I tell the clients and I tell the the, you know, the other professional that I speak with. There's enough work going around and there's enough work out there that if you're really worried about this, maybe, you know, I could help grow your business by referring the ones that I don't want. Because at the end of the day, our job is to be the the best trusted adviser for our clients, and, and we we're not gonna be that by stepping on the toes of others or poaching, in my opinion. So I have a lot of tax clients that have been my clients for ten years or so that don't even know that I offer investment advisory services because I have a relationship with that investment adviser where we've worked on the planning over years and years, and I don't there's no need for me to step on their toes.
Scott T. Nelson:So, yeah, I think anybody who's who's thinking, oh, I don't know how I'm gonna navigate this or they're afraid of, you know, that issue. There's there's enough work out there that, you don't have to worry about that. What I would say that people need to worry about is make sure if you're a CPA especially, you need to contact your state board of account account the state board of accounting to make sure that you stay in compliance with, you know, what you're offering and how and how you put yourself out there. Because, you know, if you're if if you're putting on your cards that you're a a CPA, but you're working for a company that's not run as a as a CPA firm, you could find yourself in hot water. So get ahead of it.
Scott T. Nelson:Just call, ask. What do I need to do? I'm a CPA. I'm gonna be doing x, y, or z. Like, I found that it's been, you know because I hold licenses in both Washington and here in Florida as a CPA, and I wanna make sure that and I've got clients all over The United States because my my expertise was foreign before I started doing any of this investment advisory stuff.
Scott T. Nelson:So I had a lot of people that are going all over the place. I wanna make sure I didn't cross any of those lines. Do I have to be licensed in other states for investment advisory purposes? Do I have to put a disclosure somewhere that says that, you know, I'm also a CPA? Or am I not allowed to put CPA on there because I'm not a CPA firm in that state, and I'm offering advisory or yeah.
Scott T. Nelson:There's a lot of stuff out there. Just make sure you cover yourself for compliance standpoint. It's a lot easier to stay ahead of it than fight it on the other side.
Chris Picciurro:Exactly. The complying it's it's compliance could be a headache, but they are there's a really good reason we have them. I mean, I could tell you in our teaching tech you know, any type of outside business activities have to be reported. Even the transcripts of all of our all of our podcasts have to go through our compliance department before it's published. So which is which, you know, again, kind of annoying, but kinda like when you get older and you realize the rules your parents set up for you are probably pretty good.
Chris Picciurro:And the way I look at it is, yeah, when I had you know, if I have a financial adviser, I'm very upfront with them. You know? Like, I'm not hourly facing doing financial advising, but I would say, look. The positive you have with me, because it's not it's not in any of my stuff, not on my personal branding website, but I understand your business. I understand you how to work together.
Chris Picciurro:And, you know, I'm not gonna, like we have a way that we tag clients in our CRM to make sure that they're not, you know, that that we're not yeah. We really don't have to solicit our clients. Right? They're coming to us with and we keep track of who their financial advisor is, and we make sure that we, you know, hey. I've heard should I do a Roth conversion?
Chris Picciurro:Yeah. Like, here's some numbers. Could do you want me to communicate that with your financial adviser? Do you want do you have someone you wanna invite to me? There's ways you could easily figure out what their situation is and and make sure you respect that.
Chris Picciurro:So well, I wanna personally I know you know, thank you guys. You are amazing resources. You it's so nice to have you in just our industry and and to take time out of your crazy schedules to to jump onto the show and to keep John from talking a lot this this episode. That was that was nice.
John Tripolsky:Hey. You guys know my my main goal on these is to be the dumbest guy in the room literally, and I think I succeeded once again. So this was this was definitely a great topic. And, you know, it's interesting, Chris. I know we've had these discussions way, you know, for years now about, you know, if somebody has a tax practice, you know, how do they go about expanding that, you know, with intention.
John Tripolsky:Right? So really scaling it and, you know, verse growing it. And I I would say what you guys were talking about here is a direct result of probably some plans to truly scale, right, where you're you're implementing these services. And I know, Chris, we we talked about it again recently in one of the expert tip videos about, you know, profiting through offering payroll services, you know, if that's outsourced or however you decide to do that. I mean, this is obviously a lot more detail oriented necessarily than just, you know, I wouldn't say shipping somebody off, you know, to another vendor, but it was it was great to hear this.
John Tripolsky:So I appreciate it as well. Thank you, guys.
Scott T. Nelson:Yeah. Absolutely. My pleasure to be here. As always, it was a pleasure. You know, I wanna say right you know, before we're cut off on that, Chris was actually my resource when I was trying to come through this because I posted on a, a tax forum somewhere.
Scott T. Nelson:Is are there any CPAs that have crossed over to do financial advisory services? I have no idea how to make sure I do the compliance. And Chris reached out to me, and then I met up with him in Nashville, and he kinda laid out what he did, and it helped pave the way for me. So I'm happy to be able to share anything right back.
Chris Picciurro:Well, thank you so much, man. You guys are awesome.
Trey Junkins:Absolutely. And thank you for having us.
John Tripolsky:Well, thanks to the three of you for joining us here. And, obviously, through MR Institute, we do offer some mastermind courses, which actually these I shouldn't say mastermind courses, mastermind sessions with both of these gentlemen are actually a part of. We're so we're honored to have you in that. But, also, too, we got some other good topics we're gonna be talking about here next month. So everybody who's listening to this, if you have any questions, as always, please, please, please feel free to reach out pretty much exactly like Scott did.
John Tripolsky:And then you can, you know, tap Chris as a resource. Trust me. You do not want an answer from me. So if you get a valid response, it will be from Chris. So, again, thanks for everybody for joining us.
John Tripolsky:Thank you everybody for listening in on this, and we will see everybody or hear everybody, or I should say, you should hear us on the next episode of the mister r
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