Thirty years ago, financial advisors were simply brokers. They bought and sold stocks for clients and offered few other services.
Over time, the profession began to change slowly, with advisors having to expand their offering to focus on longer-term goals, including retirement and paying for college, to stay relevant.
In the last decade, the push to do more intensified. The industry started to embrace the idea that preserving and protecting wealth via tax efficiency is as meaningful as growing it through investments. That’s prompted many advisors to create relationships with CPAs or even seek the credentials themselves.
The sharpened focus is even beginning to shape the M&A environment. Berkshire Global said in a report earlier this year that one notable development in 2024 driving deals was firms acquiring adjacent businesses, including tax services practices. The investment bank said it’s because wealthy clients want more services from their advisors in one place.
David Eisenhauer, Founder of Greykasell Wealth Strategies, puts taxes at the forefront of his practice. But he’s also an advisor who bucked the trend. Before getting into wealth management, not only was he an accountant, he worked several years at a Big Four accounting firm, auditing mid-to-large-sized firms, including multiple Fortune 500 companies.
We caught up with Eisenhauer to hear about his tax planning philosophy, how his CPA background helps clients and the biggest misperception people have about taxes.
WSR: It seems like there’s more of an emphasis on tax planning than ever before within the industry. How has the industry’s approach to tax planning shifted since you’ve been an advisor? And how has your own approach evolved?
Eisenhauer: As the value of asset allocation and investment selection has gone down over the years, advisors have needed to seek out other areas where they can generate value for clients. Tax minimization is one of the most significant opportunities for creating value for clients. Our philosophy is that taxes are a permanent loss of capital – once you pay it, you can’t get it back. If we can minimize permanent loss of capital, our clients’ outcomes are always better. The technology that is now available is enabling us to drive even more value for clients in the area of tax planning as well.
Taxes are a permanent loss of capital – once you pay it, you can’t get it back.
WSR: How did your experience working at one of the Big Four accounting firms inform how you engage clients about taxes? Do you think that experience has provided you an advantage?
Eisenhauer: My background in accounting and taxation, from undergraduate education to initial work experience at the Big Four and completing the CPA requirements, gave me a great foundation to leverage when working with business owners and high net worth clients. The ability to keep more money in their pocket and enhance plans with tax efficiency has been a significant value add. It has also enabled me to communicate with our clients’ team of CPAs and attorneys much more effectively as we navigate significant financial planning opportunities.
WSR: What do you think is the biggest misconception about taxes among investors? Among fellow advisors?
Eisenhauer: The biggest misconception about taxes for clients is that having to pay them at all is entirely bad. The reality is that you don’t have any tax consequences if you haven’t made money. So, being on the hook to pay taxes due is a great problem.
Being on the hook to pay taxes due is a great problem.
The biggest misconception among advisors is that taxes don’t matter as much as practice efficiency and asset allocation. Rebalancing and investment changes that completely ignore tax consequences may be good for managing an investment book of business and a portfolio allocation, but they often lead to additional permanent losses of capital.
Janeesa Hollingshead, Contributing Editor at Wealth Solutions Report, can be reached at editor@wealthsolutionsreport.com.
