Renowned financial advisor Ric Edelman and former Orion Advisor Solutions CEO Eric Clarke have joined the board of directors at TaxStatus, a fintech company that delivers IRS data on clients to their financial advisors.
Clients or prospective clients must complete an online authentication process to consent to TaxStatus before their IRS data is shared to advisors. The data points span total income, marginal and effective tax rates, deductions, employment history, business ownership, asset holdings, dependents, as well as brokerage, retirement, and more accounts.
“For the first time, the advisor will be able to see all the assets that the client owns everywhere, not just where it is, but how much each of those accounts are holding,” Edelman said of TaxStatus in an interview with InvestmentNews. “This is going to prove to be revolutionary as you're able to see the dividend income, interest income, and all kinds of data at the advisors' fingertips, allowing the advisor to talk to the client about bringing those assets in-house in an efficient way that has never been able to be done before.”
The added layer of IRS data provides advisors with more oversight into a client’s full financial picture to recommend better financial planning and tax efficient strategies. “TaxStatus allows the advisor to serve more clients, because the advisor isn't spending hours in this drudgery of data collection,” added Edelman, who retired in 2021 from Edelman Financial Engines, the RIA he founded in 1986 that now has $300 billion in AUM.
RIA technology giant Orion was founded by Clarke in 1999 and he retired from the company in 2023. State Street’s former global head of wealth Randy Bullard has also been newly named to the board of directors at TaxStatus alongside Edelman and Clarke, who earlier this year joined the board of RIA minority investor Elevation Point.
TaxStatus typically generates 3,000 IRS data points per taxpayer, but high net worth individuals could attract as many as 100,000 data points, given their ties to various entities.
“We're able to get all of the retirement accounts — traditional IRAs, Roth IRAs, 401Ks, individual 401Ks, deferred comp and so forth on the retirement side,” said TaxStatus CEO Kevin Knull. “We can get business ownership with income attributable to that business ownership, trust ownership with income attributable to that trust. We can get all of the real estate properties with mortgages attached, outstanding student loans, and a list of every account that the client has by custodian so that the advisor can ensure that they actually have that full picture of their investment portfolio.”
Texas-based TaxStatus launched its lead generation platform earlier this summer for advisors to receive pre-qualified client leads equipped with IRS data profiles. The firm was founded in 2017 by Charles Almond.
“Advisors all know that they don't have 100% share of wallet, and they all want to. The reason they don't have a 100% share of wallet is they don't know what they're not managing, and this technology delivers this information to the advisor instantaneously,” Edelman said. “I believe that tax status is going to prove to be transformative in the financial services industry, where it's going to be used by everybody from the wirehouses to the independents to tax practices.”
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