Stratification of Tax Professionals – Trusted Advisors
Stratification Tax Professionals – Trusted Advisors
[This gives me the rare opportunity to reuse one of my favorite infographics] It seems that every bookkeeper, generic accountant, tax professional, EA and CPA views themselves as Stratification Tax Professionals – Trusted Advisors…while a few do exist, they are a rather rare animal. There is no course that you take to school to become a trusted advisor.
- The first level role is a commodity and that is tax compliance…not simple, but it involves getting the numbers on the forms in the right place at the right time.
- The second level is rudimentary tax planning which again is a touch above a commodity and involves assistance with year-end planning, estate planning, college funding, and tends to be the level where most CPA’s skill sets end.
- The next level is functioning at a tactical level on client’s behalf in the structuring and execution of a transaction, implementing technology infrastructure, or representing a client in adversarial proceedings with a tax authority.
- The final level is a strategic one [and outside of exceptional cases isn’t relevant to practitioner with <20 years of experience] and that is strategic where the client seeks out business advice, relies on the tax professional to negotiate and represent their interests as a “business person” rather than strictly a tax professional. It isn’t coaching because at this level clients have deep experience and sophisticated judgment, the ability to view the tax professional as a truly trusted advisor.
In short, the reality is that just about every tax professional view themselves as a “trusted advisor”……but its probably a stretch to say that one out of ten actually has the skill set to deliver on the definition. If the individual has never run their own practice, or a significant business unit [let’s call that > 25 professionals in a large firm] they haven’t been exposed to all of the aspects of running a business and had to make judgment calls on financial, practice risk, and resource allocation issue