What Is Risk? Insights From the Money 2.0 Conference
The Money 2.0 Conference provides a forum for renowned financial experts, investors, and researchers worldwide to debate developments in the financial sector who have a shared goal of raising everyone’s standard of living through financial innovation. This year’s conference, which took place in Las Vegas in April 2022, covered a range of subjects in our upcoming events, including corporate management, insurance scams by fraudsters and spammers, technological breakthroughs, digital investments, cybersecurity, and AI in insurance and finance. And I’m proud to share that I was honored with the Outstanding Leadership Award.
During a panel discussion, several financial industry experts and I had the opportunity to offer our insights, where we took a multifaceted look at the nature of risk. Part of a financial advisor’s job is helping the client manage risk, a challenge that grows in complexity as a client’s income and net worth increase. I shared a few of my thoughts on the aspects of risk where I train advisors to bring more value to their clients, and I’ve expanded on a few of those insights here.
People Risk
Another subject that came up several times during the panel discussion was “people risk,” or the risk of hiring the wrong people. It is easy for a client to hire the right consultants and still get the wrong advice, if they don’t know how to manage communication on their team effectively. If a client hires a great CPA, attorney, and financial planner, but there is little or no direct communication between the different parties; no one is looking at the full picture. In addition, there are a lot of powerful tax strategies that most CPAs and financial advisors will not recommend because they are only looking within their own sphere. A financial advisor is in a prime position to help mitigate “people risk” by facilitating key dialogue with other specialists and illuminating risks and opportunities that often go unnoticed.
Legal and Tax Risk
Since I started my career, I have seen two major tax law changes, and we are in the process of watching another set unfold right now in 2022, much of which has yet to be decided. Tax laws play a much larger role than people realize because tax laws can change the incentives that drive macro-level investing behavior. When building a tax strategy, we need to look at factors like carbon and solar tax credits, Qualified Opportunity Zones, and various time-limited tax incentives. A client with real estate holdings will inevitably run into capital gains issues, and business owners need to decide how and when to pay themselves. Every change to the tax code can affect the entire picture.
How We Work With Advisors
As discussed in the panel, I have always tended to deal with the more technically complex aspects of risk in my role as a CPA. I shared in a brief interview about how I created my current business model with the goal of offering tax-planning services on a greater scale. Rather than marketing my services directly to individuals, I now focus on working with financial planners and equipping them to better serve their clients. If you would like to learn more about how to position your firm as a top go-to resource for tax strategy, schedule a consultation.
About Heath
Heath Walters is a strategic tax planning specialist who partners with financial planners to provide behind-the-scenes tax planning expertise for the high-net-worth clients of financial planning firms. With over 20 years of experience as a CPA and Certified Tax Coach, Heath helps financial planning firms set themselves apart to ideal clients through coaching and specialized services that complement traditional wealth management solutions. Heath’s proven process for client acquisition has led to many advisors doubling their book of business in as little as 24 months. Heath has both a bachelor’s degree in accounting and Master of Science in Accounting from Appalachian State University. When he’s not helping financial planners reach their firm’s goals, you can find him spending time with his wife, Nancy, and their three children, Allie, Brianna, and Cooper, or fishing, grilling, and tackling home remodeling projects. He’s an avid Roll Tide fan as well. To learn more about Heath, connect with him on LinkedIn.