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At Intuit, our mission is to power prosperity around the world. To aid customers in that regard, Intuit Accountants recently released the results of our commissioned “Tax Planning and Advisory Insights Survey.”

Tax planning and advisory services are an important extension of tax compliance services. The avalanche of new tax legislation over the past five years and the impact of COVID on firms and clients heighten the importance of proactive tax planning and advisory services.

This report is really the first of its kind to provide benchmarks for tax professionals around their tax planning and advisory services. As a CPA and the Advisory Services Leader at Intuit Accountants, I’m also pleased that it includes nuggets about how firms are updating their practices to lead with advisory services and power prosperity for clients.

Below are a few insights from our research:

Clients
Firms say the target clients for tax advisory services are business owners and high net-worth taxpayers or those with complex tax situations. Transactional tax customers with relatively simple situations are not candidates for planning and advisory. On average, firms who provide tax advisory services, so for 35% of their clients. The top quarter of firms providing tax advisory services, do so for 50% or more of their clients. Often, these top firms have been on the advisory journey for several years and narrowed their practice to focus on a specialty or niche.

Meeting frequency
When you understand who the target client is, it is easy to understand the importance of continuous planning engagements, rather than just a year end projection like traditional tax planning. Recurring meetings can create more accountability to follow through with tax plans. Most firms said they meet with planning clients two to four times a year. Virtual client meetings are more efficient, more convenient and are becoming the standard.

The avalanche of new tax legislation over the past five years and the impact of COVID on firms and clients heighten the importance of proactive tax planning and advisory services.

Positioning services
When asked about how to position tax planning and advisory services, advisors said communication and education were key. Planning and advisory engagements work best with recurring calendar appointments where advisors can understand short and long term goals, develop a plan, educate the client about potential strategies and communicate regularly about implementing the plan. Advisors also find that planning engagements dramatically simplify tax preparation and eliminate tax-time surprises.

Why not?
When preparers were asked why they did not offer tax planning and advisory services, 31% said, “My client’s returns are not complex,” while 26% stated, “My clients aren’t asking for it.” Many advisors counter that rapid changes in tax legislation and business conditions are good reasons to proactively promote tax planning and advisory services, and segment them from tax preparation services. Twenty-four percent of preparers also said they lacked the tools to deliver tax planning and advisory services.

Communicate tax savings
A growing number of advisors communicate the tax savings associated with each strategy recommended, which helps motivate clients to take action. Seventy-one percent who communicate tax savings said they usually do so verbally in-person, while 52% said they communicate tax savings in the body of an email.

Tax advisory fees
Respondents shared that tax planning and advisory services have significantly higher fees than compliance services with average fees of $2,351 per client. While 63% of planning and advisory firms use an hourly-billing model, 28% of firms are embracing value-billing models. Firms say communicating the savings from tax strategies provides a compelling comparison to support value-billing models.

These insights can help tax professionals evaluate and update their tax planning and advisory services.

Jim Buffington, CPA, is an advisory services leader with Intuit Accountants. He has 20-plus years of professional experience in sales management, public accounting, strategic alliances, product marketing, business process design, new business development and strategic planning. Connect with him on Twitter @jimatintuit.

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