The demand for instant results is seeping into every corner of our lives, making us far less patient. But that is good news for tax planning. Or it should be. The Pew Research Centre has described the dangers of hyperconnected lives with what sounds like a prescription drug warning: “Negative effects include a need for instant gratification and loss of patience.”
These are two side-effects of parenthood I can recently testify to. My youngest, Beatrice’s, needs are instant and go from 0 to 60 faster than most fast things. And my patience, I am sorry to admit, can go walkies just as quickly.
Two-thirds of advisers believe tax minimisation is at least “quite important” a part of their overall advice proposition.
But despite (the Government’s clever mobilisation of) public uproar and media hyperbole to both corporate and personal tax avoidance, three-quarters of advisers say tax mitigation has not become any more important over the last 12 months.
The vast majority of advisers expect to see no change in the extent to which tax minimisation plays a part of their overall business mix going forward. This feels like a missed opportunity, given advisers also tell us:
1: Clients are increasingly aware of tax issues and mitigation schemes available.
2: Clients are feeling unfairly targeted by the Government, yet confused and concerned about the increasingly blurred lines between avoidance and evasion.
3: Changes to tax and pensions regimes have presented clear opportunities for engagement.
But perhaps most importantly, many advisers have for some time now talked about the need to be seen to be clearly delivering value to clients against the backdrop of greater transparency and downward pressure on prices.
Unlike projected (hoped for) investment returns, the savings from smart and permissible tax planning are a known quantity. As such, it is an area where clients can clearly see the value of the expertise they are paying for.
The need for instant gratification is not new but our expectation of “instant” has become faster and, as a result, our patience is thinner.
With tax minimisation, advisers do not have to wait for the future to tangibly demonstrate the value they are adding.
It is instant and it is certain, and that is a rare thing.
Phil Wickenden is managing director of Cicero Research