Page 21 - Investment Advisor March 2022

It’s Tax Season,

and Expert Ed Slott

Provides a Game Plan

Advisors should work with their clients’ CPAs to get the

best results when it comes to reducing taxes.

BY MELANIE WADDELL | PHOTOGRAPHY BY NATALIE BRASINGTON

ax time has rolled around again, and tax and IRA explains that advisors need to be more careful than ever in
specialist Ed Slott of Ed Slott & Co. has plenty of helping clients this tax season. He also provides an over-
Tadvice for advisors. First and foremost, he told view of tax and retirement planning areas where advisors
Investment Advisor in a recent interview, now’s the time can add value to their client relationships.
for advisors to “communicate to clients that you add value Investment Advisor spoke with Slott recently from his
beyond your core capability” by advising them on tax issues. office in Rockville Centre, New York. “That’s command
Advisors, Slott said, “do a pretty good job on investing and central,” Slott quips. “That’s where I do everything; that’s
rebalancing and all that stuff, that’s kind of baked into the like a studio … as a person who does a lot of presentations,
cake.” However, if they’re “not adding value in the mind of they all went virtual very quickly” during the pandemic.
the clients, then [the clients are] going to look at price and “It’s a mess, but I know where everything is!”
everybody else’s price” compared to their advisor’s.
If advisors lack in-house tax expertise, they should “con- Backdoor Roths
nect with their clients’ CPA,” Slott said, especially if the First, hold off on backdoor Roth IRAs, Slott says.
advisor is “handling what may be your clients’ largest asset, A situation came up recently where a client had started to
their IRA or 401(k); these accounts are loaded with taxes.” contribute to their backdoor Roth, Slott relayed. “I said, ‘hold
If advisors “don’t know who [their] client’s accountant off on that’. There’s a difference of opinion with one of their
is, then that’s a bad sign,” Slott said. It’s “a great thing to [the client’s] advisors. He disagreed with me. I said, ‘there is
connect with the client’s CPA. Clients love that their advi- pending legislation to ban backdoor Roths, so I don’t know if I
sors are strategizing for them … everybody wins.” would run to do them so quickly.’ Some people are go-getters
As pending tax and retirement legislation looms, Slott and want to get that done early in the year for 2022.”

MARCH 2022 INVESTMENT ADVISOR 19