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Using Tax Services as Lead Generation, Marketing Tool

Using Tax Services as Lead Generation, Marketing Tool

Tax planning services not only offer advisors a value-add service for current clients, but a pipeline for future growth.

While investors still demand expert investment management and strategies from their financial advisors, they’re increasingly seeking out providers who can do more for them, including offer tax planning services.

Eight out of 10 of high-net-worth investors recently surveyed by the Investment Management Consultants Association said it was important or critical that their advisor be able to help them stay current on the latest tax-law changes.

But according to’s 2014 All-Channel Advisor Benchmarking report, only about 11 percent of advisors currently offer tax preparation services. Almost half of the over 2,000 advisors surveyed said they didn't offer tax services and were not planning on doing so in the near future.

That’s a mistake, says Robert Zyzo, owner of Wisconsin-based Choice Advisors, which is affiliated with Securities Service Network. Offering tax planning services is not that difficult and provides advisors the opportunity to differentiate themselves, implement a value-add service for current clients and create a pipeline for future growth. 

“Tax planning is something that has been greatly overlooked in the industry. I don’t believe tax preparers are doing enough tax planning, which creates an opportunity for financial advisors,” Zyzo says, adding he's found tax preparation to be a phenomenal marketing system.

Choice Advisors, which currently employs eight advisors, operates as a dual tax and financial planning practice. Zyzo joined SSN in 2012, offering tax preparation services to local employers and credit unions as a marketing and lead generation tool for his financial planning practice.

Zyzo started his business after completing a basic tax preparation education course, noting that advisors, even if they’re not planning on completing the filings themselves, need to understand the rules and process. He then solicited local companies and credit unions to provide tax filing services to their employees and members, hiring CPAs to run the actual tax filings.

Last year, the firm completed tax returns for large companies such as retailer Khol’s Corp., engine manufacturer Briggs & Stratton and Wisconsin-based Roundy's Supermarkets. Zyzo also signed an agreement last October with Glacier Hills Credit Union, which has about $1 billion in assets under management, to provide both tax preparation and financial planning services to its 14,000 members.

“We’ve cast a web where we have an internal base of 2,000 customers who are constantly coming across financial needs and more and more of them become both tax and financial planning clients,” he says. 

When completing tax preparation for Choice Advisors’ corporate clients, the firm includes offers for tax planning educational workshops and a free consultation. Clients then bring their taxes, investment statements, insurance documents and other information into the office for a tax-planning meeting—usually with the caveat that they already have a financial advisor and they’re not interested in those services.

The advisors don’t push the firm’s financial planning services, but once a majority of clients see the results of a tax planning consultation, they transfer their assets. "We get clients saying all the time ‘that’s cool, my current financial advisor does not understand what you just said, if you need to take over the assets to implement that plan, that’s ok,’" according to Zyzo.

As the branch has brought on more tax preparation clients, the financial planning business has grown. In 2012, Choice Advisors brought in $450,000 in gross dealer concessions, the actual commissions and other compensation paid to the advisors. Last year the branch was up to $757,000 in GDC and Zyzo expects to hit $1.2 million this year.

Since signing Glacier Credit Union 10 months ago, Choice Advisors is bringing in between $1 million and $1.5 million in assets. The firm is signing a second, similar agreement with another credit union this week and has an additional three pending later this year.

And other advisors can do the same. Zyzo says it took him just three years to go from zero to 1,000 tax clients a year, noting he’s tripled his business and hired six additional advisors to handle the workload. “We cannot recruit advisors quick enough to service the markets we’re able to open,” he says.

“Once I had 1,000 tax clients, it was to the point where it was easy create a prospect list of 20 to 30 people that I wanted to chase post-tax season; and I also had hundreds of leads to provide to junior advisors,” Zyzo says. “We’re creating a stocked pond for my guys to fish in.”

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