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Tax Planning

In a competitive business world, merely sitting back and waiting for orders is not an option for those who want to thrive. If one is to be proactive with one&#39s client base, it is necessary to communicate with those clients.

The more frequent and more relevant the communication (one about the effect of tax changes is a good example of a constructive, relevant and proactive communication), the more effective it will be.

The means of communication open to advisers have increased over the years. Whenever a new means of communication is developed, for example, the internet, mobile phone or fax, it tends not to operate to the immediate exclusion of other means of communication but increases the choice to communicators. In the end, the most effective means gets the biggest market share.

The most effective means of communication will usually depend on what is being communicated, who is being communicated with and the urgency of what is being communicated. I think it would be wrong to be over-prescriptive about the means of communication that an adviser wishes to use or wishes clients to use. There has always been the ability to communicate face to face or by letter. There has also for many years been the phone and, more latterly, the fax. The major revolution in communication, of course, has been the mobile phone and the internet.

An informative, dynamic and interactive website is an essential platform for communication.

Clearly, the more of your existing and target base who are frequent internet users, the better. Much like the use of the fax and mobile phone, there can be little doubt that the population accessing and using the internet will only increase as years go on.

An IFA&#39s website is an extremely effective means of communicating tax changes and what they mean to particular clients. Good times to communicate this information will be immediately after a Budget and before the end of the tax year. Simple tax planning and product-related tips can be included.

Perhaps most important, contact numbers can be given if a client requires to make an appointment to discuss his or her affairs with the adviser. This is an obvious way of integrating “remote” and “face to face”.

Alternatively, it may be that a phone conference can be arranged. A good website will also include an enquiry form so questions or issues can be raised through email and then taken to a meeting if necessary.

The website can also act as a source of simple education on tax planning opportunities which themselves should lead to some form of interaction or act as a prompt to contact the adviser.

This column is not perhaps the place to discuss in detail the facets of a good website but suffice it to say that, provided the client profile based on research shows that even a small percentage of clients use the internet, then having a relevant and interactive website as part of an integrated communication process will undoubtedly bear dividends.

Having a good understanding of taxation will facilitate more coherent and confident communication, whatever means of communication is used. Like any understanding, it does not just happen.

Steven Covey in his excellent book, The Seven Habits of Highly Effective People, stresses the importance of devoting a reasonable proportion of one&#39s time to improving production capability. This sort of activity will not generate immediate business but is necessary to “sharpen the saw” so as to facilitate better “cutting” in the future.

The alternative is to spend all one&#39s time producing but the outcome of this is that, eventually, the means of production (your knowledge and understanding) becomes less effective. It is essential in this time of change and increasing demands to stay ahead of the relevant developments and innovations in your chosen market.

The essence is to know more and more about more and more and avoid knowing more and more about less and less. The outcome of this may well be knowing everything about nothing trite, I know, but there is more than an element of truth in this.

Putting aside learning time in a busy schedule is very difficult but it really is essential and I suppose we have the regulator to thank for making it a requirement. Financial advisers ought to be looking for any effective means possible of ensuring they can keep abreast of changes and, perhaps, most important, what they mean to their business.

Effective learning, I believe, always has a lot of “which means that” statements in it. These should exist in response to the question “So what?” For any learning to be effective – and tax learning is no exception – it is essential for the tutor to ask himself whether, for any important fact, one can give a coherent relevant response to the “So what?” stated after any piece of tax information.

One should only feel satisfied when one can answer with a statement that is meaningful to the client.


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