Five Reasons Some Financial Planners Avoid Tax Planning

A financial planner shakes hands with a client in the adviser's office.

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“My current advisor doesn’t talk about tax planning.” This is one of the biggest concerns we get from people who are looking to work with us. The reason is that we take a tax-smart focus in our financial planning. All the decisions we make are based on tax planning. It’s the foundation of what we do. Unfortunately, most financial planners do not take that approach.

Many financial planners only manage investments, and if you ask them if they can help you with tax planning, they will tell you to see your CPA. I disagree with that approach. Here, I’ll explain why I believe most financial planners do not talk about tax planning and then give you some tips on how to ensure you’re getting the right type of help.

1. Bigger companies will not allow their advisers to do tax planning.

This is one I’ve experienced myself. Bigger companies have more liability because they have more inexperienced advisers to whom they must pay attention. Many of their processes and compliance measures are based on the lowest common denominator, meaning that a new, inexperienced adviser is held to the same standard as an adviser with 20 years of experience. They simply have to do it to avoid getting themselves in trouble.

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I do not agree with this or think it is right, but it is something to consider. This is why advisers at bigger companies often tell you to see your CPA because they are not tax professionals.

I think financial planners should help you with tax planning without hesitation. The same advisers who tell you this are still giving you tax planning guidance in some way. For example, if they tell you to do a Roth IRA vs a traditional IRA, that is considered tax guidance. Why would they even tell you that if they are not tax professionals? I do not believe this to be a valid excuse, so if your adviser tells you this, you may want to get a second opinion.

2. They may not have the expertise.

Many advisers out there may not have the expertise to do tax planning. It is certainly tough to do and takes another level of knowledge and training to understand. Many advisers who have been around for a while never received training to do tax planning; they only received training to manage investments. Because of that, they have not transitioned to being comprehensive retirement planners instead of just being salespeople or investment managers.

If you’re wondering if an adviser has the expertise to do tax planning, one of the first things to check is that they have the CERTIFIED FINANCIAL PLANNER™ professional designation. This designation states they have gone through a course on tax planning. It is also the gold-star credential in the industry, in my opinion. It means they have specific experience and are held to a fiduciary standard of excellence for their clients.

3. They may not participate in ongoing education.

This is connected to point No. 2. To have the expertise and training, you must stay educated on the tax code. As we all know, the tax code changes often. Because of this, you must stay up to date.

This is something that I do personally, as I read changes to the tax code nearly every day to ensure that our firm is giving our clients the best guidance we can when it comes to tax planning. If your adviser is not proactive and committed to staying current on the tax code, they will likely give you outdated advice.

4. They’re not willing to commit to the time it takes.

Also, in connection to No. 2 and No. 3, many advisers do not engage in tax planning because it simply takes too much time. Most advisers already have hundreds of clients, and with high retention rates in our industry, some people will not leave their advisers, even if they’re not getting the best service. Hence, some advisers know they can get away without going above and beyond for their clients.

If your adviser is on autopilot and not taking the extra time you deserve, this could be another reason to get a second opinion. Most advisers in the industry have been doing their job for a while, so they may not be as excited or hungry to help you with this type of planning.

5. They’re concerned about compensation.

I hope this is not most advisers’ reason for not doing tax planning, but it certainly could be a factor. The reason why is that if you, for example, do a Roth conversion and pay the taxes from your investment, you’ll have less money in your investment. Most advisers are paid based on an assets under management (AUM) fee, which means they’re paid on the amount of investments you have with them. That could mean less income to them up front, because paying those taxes lowers your investments.

A true fiduciary should not have this concern, but unfortunately, I’ve seen this happen in our industry. At the end of the day, the adviser should always be doing what’s in the best interest of their clients and not worry about making a few more dollars. But as you can see, this is a conflict of interest because it requires more work and for less pay — another reason why you need to find a trusted guide who is not going to take this shortcut with your life savings.

The points I’ve mentioned are why I started Peak Retirement Planning, Inc. Tax planning is a foundation of what we do because, in my mind, taxes are the biggest expense for the majority of retirees who have been diligent savers over their lifetime. Why are we sitting back and just hoping that Uncle Sam does not take more of our hard-earned savings than he deserves? I’m all for paying my fair share of taxes, but I don’t want to tip Uncle Sam more than I need to.

Through tax-smart planning, you can avoid overpaying taxes by following what the tax code gives you and implementing the strategies correctly. If your financial adviser tells you they do not engage in tax planning and that you should work with a CPA, but they are still charging you a full fee, then I would say you want to go somewhere else.

After all your hard work over the years, you deserve to have an adviser do the best work for you — especially when you could pay an adviser probably the same fee to give you much better service. Tax planning is not something you want to miss when it comes to retirement planning.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Joe F. Schmitz Jr., CFP®, ChFC®, CKA®, is the founder and CEO of Peak Retirement Planning, Inc., which was named the No. 1 fastest-growing private company in Columbus, Ohio, by Inc. 5000 in 2025. His firm focuses on serving those in the 2% Club by providing the 5 Pillars of Pension Planning. Known as a thought leader in the industry, he is featured in TV news segments and has written three bestselling books: I Hate Taxes (request a free copy), Midwestern Millionaire (request a free copy) and The 2% Club (request a free copy).

Investment Advisory Services and Insurance Services are offered through Peak Retirement Planning, Inc., a Securities and Exchange Commission registered investment adviser able to conduct advisory services where it is registered, exempt or excluded from registration.