Financial Advisor News recommends that advisors conduct proactive conversations now. A proactive conversation now can prevent a year-end rush or panic by clients and ensure clients stay aligned with their financial goals. Below are Financial Advisor News' key questions that help guide those discussions:
When do you plan to file your taxes?
Some clients prefer to file early to expedite potential refunds, while others wait until the April deadline. Knowing their timeline helps you prioritize service, especially once 1099 forms are issued.
What will your accountant need from you?
This gives insight into the documents they must gather—1099s, bank statements, and records of charitable contributions. If their accountant has retired or changed firms, you can step in early to assist rather than react later.
How are you handling charitable contributions this year?
Clients may give through checks, long-term appreciated securities, donor-advised funds, or RMD-related strategies. Understanding their approach ensures their tax planning remains accurate and timely.
Have you taken your required minimum distribution (RMDs)?
Clients aged 73 or older must take their RMDs. Even if most assets sit with you, they may also hold retirement accounts elsewhere. Missing an RMD exposes them to penalties, so addressing this now is essential.
Have you contributed to your retirement plan?
Those who rely on payroll deductions usually stay on track, but self-employed clients or those with side income may still need to meet contribution deadlines. Encouraging early-year contributions also maximizes growth in a tax-deferred account.
Do you plan to contribute to your foundation or donor-advised fund?
Clients who use these vehicles must complete contributions before the year closes if they intend to claim a deduction. Even internal asset transfers should be handled promptly to avoid timing issues.
Have you opened any additional online trading accounts?
Clients sometimes open small "play money" accounts without disclosing them. These accounts affect their overall gains and losses and must be incorporated into their broader tax picture.
Have you reviewed realized gains and losses year-to-date?
You know their numbers for accounts held at your firm, but their full tax picture includes assets held elsewhere. Understanding gains and losses across all accounts informs year-end planning.
Do we need to open or fund any college savings accounts?
Some clients fail to update advisors about new children or grandchildren. Checking in ensures education planning stays on track.
Have there been any major life changes this year?
Job changes, marriage, divorce, or layoffs can significantly affect financial planning. A broad question now ensures their plan reflects their current circumstances. Clients understand the importance of these questions, and addressing them before holiday schedules tighten helps avoid year-end scrambling.
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