A new automated tool that lets advisers match individual client data to tax-advantaged financial strategies was announced Wednesday.
Independent broker-dealer HD Vest Financial Services Inc. unveiled 1040 Analyst, which is built to address both tax and wealth management strategies for its affiliated advisers. The product will launch the week of June 4-7, coinciding with HD Vest's CONNECT2014 conference.
1040 Analyst integrates IRS Form 1040 tax data with information about the individual's personal finances and goals, enabling advisers to offer clients actionable — and tax efficient — investment and wealth management recommendations, according to a statement from HD Vest.
“The Congressional Budget Office finds that taxes are the largest expense for Americans, and more taxes are coming out each year,” said Scott Rawlins, HD Vest's managing sales director. “You can't truly have a holistic wealth management approach without sensitivity to tax implications.”
The new tool exports files from the four tax software packages that an HD Vest survey found are most used by advisers: Intuit Pro Series, Lacerte, Drake and UltraTax CS, according to Mr. Rawlins. HD Vest's 1040 Analyst matches those exported files with information from clients' 1040 tax forms, using the broker-dealer's proprietary algorithm to connect data points.
The scalable tool lets advisers generate customized reports that find investment planning opportunities for individual clients, and allows each client to receive an updated report annually, identifying new opportunities that may arise as financial status and goals evolve.
The automated 1040 Analyst is especially valuable because it finds inefficiencies that advisers may not see, Mr. Rawlins said.
”Our adviser clients may not realize that there's a financial planning opportunity. We call them blind spots,” he said. “For example, they may not check their beneficiary listings or the tax-efficient titling of assets.”