This post will quickly join the social media world today as one of the 87 other articles that attempts to lure in the advisor reader with a way to attract a prospect with the “Save on Taxes”, elevator pitch. Problem is the Tax topic works on almost anyone, after all whom does not want to reduce the burden of funding the overspending!
Problem is they are attracting everyone when with the right elevator pitch on Taxes they can attract the RIGHT prospect, instead of any prospect. The people that have the tax issues generally limited to successful investors do not catch the ear of the common man as the topic is foreign or not relative. For instance when given an opportunity in a group to let loose a business blurb in a small group setting you could simply say, “Well, I help people reduce their tax burdens” and have the 5 golfers at the tee all think…Hmmmmm I should call this guy! Even though two of them have less than 50K in income and no savings other than the spouse`s 401K, or you could say, “I help people reduce the capital gains Tax exposure on there stock portfolios that have been successfully grown but not properly harvested!” Then only two of the 5 golfers are going to Hmmmmmm ..But the RIGHT TWO!
Two things to do…..
FIRST:Laser focus on word phrasing which is an Art that is sadly overlooked by most advisors. We challenge you to right down your elevator pitch and examine every word for waste and lack of an implied call to action.
Second: Learn how to reply when the right golfer asks for an example of “How” you work your capital gains magic, don’t say something they are already familiar with. You could say, “we harvest winners and then sell losers against them.” Then your golfer with think, I can do that myself…your putt has rolled by the pin:-(
Or you could say, “We have a review process to determine the correct method to use in each case but DAF`s, Nimcruts, Crats, One time pre payment of tax loads and Sale balancing with ETF sector matching are all considered!” You don’t need to be an expert in all these options you only need to understand they are all solid ways to get the job done.
An Example: Donor advised funds can be an important strategy for clients who have large capital-gains taxes in years they retire because they have to sell company stock and exercise stock options. A client can make a large contribution of Stock to a DAF in a year when the tax bill is particularly high and distribute the funds to Charity or Church over many tax years in line with what is the clients normal planned annual giving.
Another strategy is to pay state taxes before the end of a tax year because that creates a tax deduction for the following year. “It ends up being a Big Missed Tax Deduction” that many clients leave on the table by waiting until the following April.
One RIA in our cloud community phrased the issue the best, “A lot of people are straying from their strategic [asset] allocation, which is a terribly bad idea,” he says. “They are using capital gains taxes as a mental excuse to stay long in stocks.”
Point is if your self-employed than every conversation is an opportunity to harvest a good sale and more importantly for your time management to repel a bad prospect. It`s an art you need to learn and having your gun loaded with the right armor piercing ammunition is what you should spend time understanding and mastering.
You’re Welcome,
The Tax “What if” Dr 😉