One of the most complex decisions a professional can make with a new service offering is figuring out which clients to offer it to first. This is all the more true with wealth management, where the questions a fledgling advisor might ask in picking their inaugural clients are legion.

For instance, is it better to start with clients with significant investable assets, or those with more manageable portfolios? Would beginning with younger clients give an advisor more time to recover from any potential rookie mistakes? Is it worth risking a high-value client relationship, or should advisors “practice” on clients they can afford to lose?

The variables for picking can multiply until they seem endless, but Chad Smith, a wealth management strategist at HD Vest Financial Services®, suggests that accounting and tax pros cut through the clutter with a simple philosophy: “I think you’re looking for the opportunity where you can help them from a tax angle,” he said.

That tax expertise, after all is why accounting and tax practitioners are a natural fit as wealth managers – and with tax season just completed and clients’ tax situations fresh in their minds, Smith recommends picking the first set of wealth management clients based on three criteria:

1. Tax data. Simply put, “It’s clients with Schedule B income, the clients with Schedule C income, or the clients with Schedule D income” who should be high on your list, he said. “Schedule B means they have investments, Schedule C means they have a business, Schedule D means they have capital gains, and therefore they have assets.”

All of that means that they are likely to stand in need of professional planning advice – and in fact, their need for tax-savvy wealth management services may well be evident right in their tax returns.

2. Age. Another criterion to consider is age. Starting at 59-1/2, when savers can start accessing some retirement accounts penalty-free, there are a series of milestone birthdays that offer great openers for the wealth management conversation, Smith said. At 62, for instance, clients may need advice on their Social Security strategy, while at 64, they should start thinking about Medicare, which kicks in when they turn 65. Even a client as old as 70-1/2 can still benefit from professional advice.

“That’s when so much of the really good estate planning gets done,” Smith said. “The conversation may start with required minimum distributions, but you get into estate planning, gifting, and charitable planning. Quite often, the most complex cases we see are in their 70s. A lot of very affluent business owners don’t really start to step back until they’re 70. We have a lot of very strong financial advisors who are still going strong at 70. You’ve got income planning, charitable planning, distribution planning, business liquidity events, generational business success planning and more.”

He also strongly recommended looking at clients who are approaching age 64: “That is a big age to add value at, because they start having the Medicare conversation –you can answer questions like ‘What is Medicare Part A? What are Parts B and C? Should I get a Part D supplement?’ Those lead to a good wealth management conversation, because no one’s doing a good job of having those planning conversations around health care.”

3. Relationships. Finally, Smith recommends a simple question: “Who do you like the best and who do you want to work with?”

“I would make the argument that a lot of your best relationships have been asking for it all along,” he explained. “There’s a lot of low-hanging fruit in tax practices. If they say, ‘Help me out with this,’ you help them first."


For more information about HD Vest Financial Services and how they can help you transfer a client’s wealth, visit hdvest.com/join 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. Asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

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.