New tax planning tools from Wealth.com, Nitrogen, and others show popularity of tax planning

There's a cycle that's occurred several times over the life of the financial planning profession that goes something like this: First, a small number of financial advisors find an innovative new way to better serve their clients. That then becomes a way for those planners to differentiate themselves from the existing status quo, giving them an advantage in marketing and highlighting the value of their advice. Other advisors begin to catch on to the opportunity and adopt it, simultaneously doing better work for their clients and more rapidly growing their own businesses. Eventually technology solutions pop up in response to growing interest in the new advice model and innovate new ways to deliver it better and more efficiently. Around this time, larger enterprise firms begin to adopt the new model, enabled by the technology providers' promise to make the model scalable and handle the heightened compliance concerns of the bigger firms. Ultimately, the 'new' advice model becomes part of the status quo going forward: It's no longer a differentiator between firms, but is simply the baseline expectation, and the solutions become largely commoditized.

For example, advisors once predominantly sold individual stocks and other products to their clients from their wirehouse broker-dealers' inventories, until some advisors started to differentiate themselves as 'independent' broker-dealer representatives who would choose the 'best' diversified mutual funds to sell. And then that became more or less the status quo, until some advisors began to differentiate themselves by managing entire diversified portfolios for their clients for a fee instead of selling various third-party mutual funds on commission. And then that became the status quo, until some advisors began to differentiate themselves by offering more comprehensive financial planning beyond portfolio management alone. And by sometime during the 2010s, offering comprehensive financial planning was itself the status quo: It had grown so commonplace, facilitated by the rise of planning software like Naviplan, MoneyGuide Pro, eMoney, and RightCapital, that it was no longer an effective differentiator between one advisor and the next.

After comprehensive financial planning, the next frontier for financial advisors has become tax planning. Which isn't exactly new (it has long had a place in the CFP educational curriculum), but has become a much bigger focus over the last 10 years or so as advisors have started going deeper into different areas of tax planning focus like asset location, equity compensation, concentrated holdings, and business tax strategies.

The movement toward tax planning was supercharged with the introduction of Holistiplan in 2019, which allowed advisors to expedite their reviews of client tax returns by creating a simple tax summary based on the client's uploaded tax return (from which Holistiplan automatically extracted data to populate the tax analysis). Advisors can also create short-term (usually 1-3 years) tax projections based on their current return's baseline, allowing them to model different planning scenarios and strategies they might recommend, and show the resulting impact on the client's taxes – but many advisors don't even get into the projection functionality, instead focusing solely on the current-year summary to help the client visualize their current tax situation.

The upshot was that with Holistiplan, all of a sudden almost any advisor could do at least a basic amount of tax planning, even if that just amounted to going through what was in the client's tax return summary, and many advisors did exactly that: As of the latest 2024 Kitces Research on Advisor Productivity, 92% of advisors stated that they do some level of tax planning for clients, and the 2025 Kitces Research on Advisor Technology showed that over 50% of advisors use Holistiplan to do that tax planning.

But the fact that so many advisors now advertise tax planning as a component of their services, and that so many of them use the same software to do it, strongly suggests that tax planning (like many differentiators before it) is itself becoming commoditized. It might no longer be enough for an advisor to merely say that they offer tax planning: If a client can get the same thing from an advisor down the street using the same software, it's just the status quo now.

Which makes it interesting that, after many years where Holistiplan has dominated the market for tax planning software (albeit with some competition from FP Alpha in more recent years), several technology providers have recently launched their own tax planning tools, including Wealth.com, Nitrogen, and Altruist's Hazel (as add-on tools to their existing platforms), as well as standalone planning tools from Hive Tax AI and april.

It's likely no coincidence that the slew of new planning tools to compete with Holistiplan are emerging just as AI is making it easier to extract and organize data from client documents (and more generally, to stand up new software solutions). The functions that originally required Holistiplan to program pre-AI Optical Character Recognition (OCR) technology to scan dozens of different tax forms and then digest the data and output it into a standardized report can likely be handled by AI tools with a fraction of the time and resources. And AI has also allowed the new generation of technology to do something that Holistiplan (so far) does not do: Allow advisors to enter client information freeform via a chatbot interface, and generate answers and even ideate tax planning recommendations based on the client's information in real time. In other words, these tools go beyond 'just' calculating the client's current and future tax situation and allowing the advisor to model their own tax planning strategies as a projection tool, but instead play a direct role in coming up with the strategies themselves. Which in theory can support deeper tax planning by at the very least affirming strategies that the advisor might have in mind and potentially even surface new strategies that the advisor hadn't thought of.

The caveat, though, is that one thing that's become apparent in recent years in the ecosystem of specialized financial planning tools is that many advisors are hesitant to start conversations and bring recommendations to clients where they aren't prepared to answer follow-up questions that the client might have. If a tax planning tool suggests a strategy that the advisor isn't familiar with, is the advisor then going want to bring it into a client meeting where the client might ask, for instance, what the impact of this strategy will be on their taxes in three years, and then be embarrassed that they can't competently answer the client's question? Conversely, for advisors who are already comfortable with going deep into tax conversations, will they see the value in a tool that suggests strategies that they likely already know?

By contrast, Holistiplan's core features of a streamlined tax summary report and a tax projection calculator allows it to meet advisors where they're most comfortable. Whatever recommendation the advisor brings to the client meeting, they can relatively easily change the projected scenarios and demonstrate the strategy's impact. This is arguably one thing that has helped Holistiplan succeed over the years: That regardless of the depth of tax planning that the advisor wants to go into, Holistiplan can most likely support it, and show the value of the recommendations that the advisor already was knowledgeable about and wanted to recommend. And though it can be argued that technology can and should be used to nudge advisors towards doing more in-depth tax planning, it's an open question as to whether advisors in reality will be receptive to a tool that nudges them towards strategies they'd have trouble explaining to a client themselves (for which a brief in-tool "summary of how this tax strategy works" may not be enough real-time education to drive adoption).

In the end, though, there likely is going to be an incentive nudging advisors towards more in-depth tax planning, and that's the commoditization of basic tax planning that already seems to be occurring (which, as always, pushes advisors to add more value on top of the commoditized layer that everyone else does). Much as offering generalized "comprehensive" financial planning ceased to become a differentiator once everyone else became comprehensive financial planners, performing basic tax return reviews and high-level planning conversations doesn't help a planner stand out as much when everybody else can do the same thing in Holistiplan. Which is ultimately both good and bad news for Holistiplan: As the fairly entrenched incumbent in the space, it has a very comfortable lead in market share – but on the flip side, it also has a lot of potential market share to lose, and the near-ubiquity of tax planning today means that there's an incentive for other platforms to spin up a lower-cost competitor. In the end, though, the question will be whether those solutions will be good enough – and whether they'll enable the kinds of tax conversations that advisors actually want to have – to peel enough users away from Holistiplan to threaten its dominance?

This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-march2026, and has been reprinted here with permission.

Ben Henry-Moreland 

Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.

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Michael Kitces

Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

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