As valuable as a well-prepared tax return may be, it’s even more valuable as a doorway to a deeper, more valuable investment planning relationship. All it takes are a few well-directed questions.

This kind of detective work can take you beyond the nuts and bolts required for completing 1040s, and into a clearer understanding of your client’s finances and possible needs, according to Chad Smith, a wealth management strategist at HD Vest Financial Services, who offered these questions as a guidepost to get the conversation started:

1. How’s your health? Suppose your client is 60 and answers, “Funny you should ask. My doctor told me yesterday that I’m a heart attack waiting to happen if I don’t make some pretty drastic lifestyle changes immediately. Somehow I don’t think I need to plan for 30 years of retirement.”

A suitable response might be: “Pray for the best and plan for the worst.” That means encouraging your client not only to comply with the doctor’s instructions, but also to meet with an estate planning attorney to ensure that their will and all their other arrangements are up to date.

2. Has anything changed in your cash flow this year? Clients make all kinds of significant purchases — a new house, a $75,000 Mercedes — and unless they have considerable wealth, such events call for a re-assessment of their retirement savings plan, among other things.

And if they’ve amassed unsustainable levels of credit card debt, you might be able to assist them with a spending analysis and debt-elimination plan.

3. What has changed with your family? Millions of Americans are now caught in the “Sandwich Generation” squeeze, caring for both their children and their elderly parents. How are they handling it? One red flag to watch out for: clients who assume they will be bailed out with an inheritance. Guide them against counting their chickens before they are hatched.

4. Do you anticipate a significant change in income in 2015? Maybe your client has a lock on a new job that will boost their pay by 33 percent. This leads to conversations about such topics as how the percentage of change in net pay can be less than that in the gross, if a higher marginal tax bracket comes into play. How much of that higher after-tax income should be earmarked for long-term financial goals, and how much can be enjoyed in the present?

What if the client’s employer is on shaky financial ground and lay-off notices are falling like rain? Does the client have sufficient liquidity to withstand several months of unemployment?

5. What keeps you up at night? Is it the fear of a re-run of the 2009 financial market meltdown and subsequent recession? Going broke in old age? Putting children through college? Becoming disabled at the peak of one’s earning years?

While not all causes of anxiety have a financial dimension that you can help clients confront, many do. But if it’s a personal matter that you have no ability to deal with, simply providing sincere re-assurance and moral support can only lead to a closer relationship with that client.

For more strategies, visit the Tax Alpha tab on

Published in partnership with HD Vest Financial Services.

For more information about HD Vest Financial Services and how they can help you transfer a client’s wealth, visit or contact a Business Development Consultant at (800) 742-7950.

HD Vest Financial Services® and its affiliates (collectively, “H.D. Vest, Inc.”) do not provide tax or accounting services. You should consult your tax professional regarding the tax implications of any investments.

The views and opinions presented in this article are those of Chad Smith and not of HD Vest Financial Services® or its subsidiaries.

HD Vest Financial Services® is the holding company for the group of companies providing financial services under the HD Vest name.
Securities offered through HD Vest Investment ServicesSM, Member SIPC, Advisory services offered through
HD Vest Advisory ServicesSM, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000.

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