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How a tax-efficient financial advisor can help you

Category: Finance

Advisors should be aware of and sensitive to your tax situation, but sometimes problems may be hard to detect unless you know where to look. For example, the client may not disclose all the accounts he or she has, so an advisor won't know how other accounts are invested, or more importantly, what the gain or loss landscape may reveal.

An advisor who is fluent in the tax strategy will ask about other accounts in order to avoid realizing a gain or loss in error thus creating an unanticipated tax issue. Simply put, a financial advisor with tax experience has the mindset to always be on the lookout for ways to save on taxes. Even if they switch careers, they likely don't lose that instinct.

On the other hand, financial advisors are usually investment professionals first. They are looking to grow your assets, and tax consequences may not be a priority, particularly if that advisor is paid on a commission basis.

Combining the long-term investment planning mindset of an advisor and the tax-savings mindset of a CPA, however, can be a great thing for your investment strategy.

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