A CPA's $10,000 Mistake (& How We Caught It)

Phil, a few weeks ago, you were scanning a client's tax return, couple in their 40s, and you immediately got up from your desk, walked down the hall, and asked him a question. What did you ask him?

I know the case you're talking about. I was reviewing their tax return. He was the lead adviser on this case. And my question was, why am I seeing a distribution, an IRA distribution, which obviously is a fully taxable distribution. And I was confused because these people aren't distributing. These people are saving. And there could be a distribution if we're doing a Roth conversion. And I saw that amount and so I went and asked.

And what did he say?

I think his answer was they didn't have a distribution.

Okay. What did the return say?

I think I said their tax return says they did. So, somebody's wrong. Okay. Either they did or they didn't, but I need to know because this tax return says that they did. And by then I had the tax return loaded, looking at it, had really reviewed most of it, but that first page just jumped. It was bold just right in my face. And I thought, wait a minute. I knew the couple, know who they are and know what their goals in life are and what they're trying to accomplish. And I knew there shouldn't be a distribution there. And so that led to a conversation with the lead advisor and which we determined it wasn't supposed to be there.

Got it. Got it. So how long had that been sitting on the return before someone noticed?

Long enough that the 1099s were issued, someone got the information, filed the tax return, and taxes were paid.

When you say that the error was there long enough for it to be filed, what damages did that cause? What did it cost the client?

About $8 to $10,000 was the result, which of course meant we were going to have to amend, address it with the CPA, which is never an easy conversation. You don't want to call another professional and say, "Hey, by the way, right, there's a pretty glaring mistake or error on this tax return." We did. We made that call and I have to say that CPA, I don't know him. The lead adviser has worked with him and so my understanding was they had a good conversation. Then I was on emails with them and I think he was quick to address that there was a mistake.

Mhm.

I think the part that might have been a little disappointing to me was he was also quick to say this is somebody else's fault within my group and so it'll be a good teaching opportunity, I think he said. And I thought, I don't really love the idea that our client is the guinea pig so that you can teach your team while our client, if we didn't recognize this, ends up paying eight or nine or $10,000 of tax that wasn't due.

Yeah.

Right. So, I don't want to be an experiment for CPAs who have people who, I don't think they're inept, but they clearly miss something because no one bothered to ask the question.

Yeah.

Does this, is this 1099? Is it telling us the whole story?

And in the entire time that this back and forth is occurring, the client had no idea.

The client did not. At this point, we were reaching, we were communicating with just CPA. Then because we knew that an amendment would need to occur, we eventually told the client. So we do tax planning before the fact. We do tax review after the fact. We still want to look at those returns. Spell, you work with clients every day. And one of the things we ask for is we need your latest tax return, right? So we want to plan for before the tax return is completed, right? And then we want to review it after and make sure that, because look, with CPAs or any tax preparer, with the greatest intentions can make a mistake.

Sure.

Or something may not be known to them.

Yeah.

And if that communication is not there, if they're not talking to, where if they're not getting the right data and they're not hearing from the right people, then it would be pretty easy to record the wrong information on their tax return. I think the biggest problem I had with all of this, Spell, is they didn't have a system, a backup to prevent this failure, right? Once that tax return was signed and filed, for that CPA, who I think wants to do a good job for them, that was case closed, right? It was in the files until next year. Probably never going to be detected that that client overpaid by 8 to $10,000.

Yeah, that's a lot. That's stuff.

It's a lot. That's a lot. It's a lot. To some people 8 to 10,000 is not a lot, but for a 40year-old who has 20 years to go, compound that 10,000 over 20 more years at an 8 to 10% rate of return. That's significant money.

Yep.

Right.

So, what planning were we doing? What were we trying to help our clients implement that would have caused this in the first place?

Well, in this case, now that we're talking about it, I'm remembering some of the elements of this case. And what happened here is every year the lead advisor does a backdoor Roth for these people. And because their income is such that they can't do a traditional style funding of a Roth, right? They have to do the backdoor. Okay? So they put dollars in after tax to their traditional IRA and then the lead adviser, he immediately has our cashiering folks move that over to a Roth account. So we have that traditional IRA, it's a zero balance account, sits there, money rolls in and immediately rolls out.

Got it. Did our team do that correctly?

Yeah, our team did it correctly. And here's what happened. And I don't remember the numbers necessarily, but I remember that the money did not immediately move to the Roth. It was 20 grand was what moved.

Okay.

So what happened is it sat there long enough—

Yep.

—that some interest accrued.

Mhm.

And I think it was around $200, maybe around $153.

153.

That 153 is what should have been on that tax return, right? Instead, the entire backdoor amount, it was seen by the CPA firm as a distribution from a traditional IRA when in fact it should have been $153.

$53.

That was the amount that should have been on that tax return, not the full distribution.

So, just slow down for a second if you don't mind. How does a strategy that we're going to implement with a client that should be, or cost about $153 in tax, turn into an 8 or $10,000 tax event?

Well, when you end up with two people who were maximizing their what eventually becomes a Roth IRA and they're trying to put 8,000 or so dollars in a year times two people and they're paying very high income tax because they're making a lot of money. Fortunately for them, their income in their 40s, they're doing very well, right? So they're paying some pretty significant tax and so instead of us showing $153 of a distribution, which is legitimate because that interest, we can't get away with that, right? But the rest of it was money in, money out. That money was already taxed money. So when they put that money into that traditional IRA, they're not allowed to because they make beyond the limit, which would disallow them from doing a tax deductible IRA contribution. So it's all after tax, right? So that money should not be taxed when it moves to the Roth in the backdoor environment.

Got it?

In this case, it didn't look like that to the CPA. When they saw the 1099, they thought, "Oh, this is just a full distribution."

Okay. So, stay right there. What did the CPA have on his desk? What did the CPA see?

Well, I think the CPA, the only thing they would have would be the 1099, which shows what? Well, that 1099 would show what's, particularly how it's coded, right? So, depending on the code on that 1099, it would tell them is this a distribution and what type of distribution this is.

Got it.

I think that's where the problem began and probably started and ended right there. First, nobody asked.

Yeah.

Nobody bothered. And this is what we talk about so often and I can't stress this to our listeners enough. If your CPA and your advisor, wealth advisor, financial planner, whoever it is, Spell, if they're not talking multiple times a year and actually planning for you, right, then you're going to miss these things because a 1099, it doesn't have a set of instructions on it. It has codes, right? And for someone who is more lay or who is learning this stuff, they might not ask the right question.

Yeah.

And if their supervisor, in this case the CPA that owns this group or owns this CPA firm, if he didn't know this is happening, then it's going to slip right past him.

Mhm.

Right. He's not looking at that 1099.

Yeah.

And so this person misses it. They don't know what to ask. 1099 is exactly what it was supposed to be.

Mhm.

But they see the distribution and they accept it as this is a full distribution, not just the interest.

Yeah. This is more and more interesting to me because clients are in their 40s and distribution from a qualified environment. There's a penalty for that, isn't there?

Well, they got that on top of their ordinary income tax. So they had a 10% pre-59 12 years old penalty and that is inexcusable, right? That's going to happen. Doesn't matter who you are or what you're doing. There are only a few parts of the code that allow you to avoid a 10% distribution tax, right? So that excise tax, that's a penalty.

Yep.

And everyone's going to pay that if you pull from an IRA or a qualified account pre 59 and a half unless a few special circumstances are in existence.

Yeah.

And if they're not, you're going to pay ordinary income tax and a 10% penalty. So in their case, think about someone paying 30 to 35% tax and now let's pop another 10 on top of that. We're starting to head up towards 50%. Right? This client, because they have other investments, they also run the risk of a net invest or net interest or an NIIT tax. So this net interest investment tax, another 4% or 3.8, when that hits you could be over 50%.

You could be over 50%.

Quickly you get up there, you're certainly knocking all over the door of 50%.

Yeah.

And so you ask me, well, how can they end up paying all this tax? Well, this one $20,000 penalty can quickly get you up to that $8 or $9,000 range.

Yeah. It didn't have to be that way.

No. Now, fortunately, we were able to get the CPA to unwind this, file an amended return, which, this thing wasn't that old. We called it, file the amended return. So, it's a 1040X. So, they file the 1040X, get everything corrected. Here's the problem, though. Our client doesn't just get a deposit back in their account.

Not from the IRS.

The IRS gets it back to you when they get ready.

When they're good and ready.

And so our client has to let go of all that money.

Yeah.

Unnecessarily, right? Unplanned. Certainly not egregious, but they have to wait on their money to come back.

Yep.

And if they didn't send it, they run the risk of penalties, right? When they did nothing wrong, right? I just can't stress enough, and we talk about this in our client meetings. We talk about it in the bullpen, so to speak, when we're working on plans around here, doing planning sessions.

Mh.

If there's not coordination between the professionals, usually the attorneys, the CPAs, the advisers.

Yeah.

If that kind of communication is not happening, suffice it to say, there is a strong chance that somebody is going to pay something that wasn't owed. Someone's going to have problems. Mistakes are going to happen. And generally, the person who pays the price is going to be that client.

Yeah. Yeah. So, Phil, let's play this out for a viewer or listener. They're sitting at home. They're thinking, "I have a CPA that I like and that I trust. I have a wealth adviser that I like and that I trust. How do I know that this isn't happening to me?"

It's, first, it's a legitimate question. I think what our listeners need to take away from this, everybody listening to this, here's what you can take away. You can rest assured that unless you have intentionally asked those people to communicate with one another, or unless you happen to get lucky enough to work with those professionals who insist on that level of communication, right? It's not happening.

Yeah.

So that's point one. So hang out at the house, relax on your sofa, and watch your favorite TV show, but in the back of your mind, know that there is probably a gap in communication. Your CPA is probably not sitting in his office thinking, gosh, I better call that wealth adviser and make sure everything's okay. And that wealth adviser is probably not thinking, I better call the CPA and make sure it's not happening. Right. Here's why it doesn't happen, Spell. With all due respect, I'm married to a CPA, so I get to say this.

Okay, fair enough.

The CPA is sitting over in their office and they're the number expert. And in some ways, that's absolutely true. They are the financial planner, the wealth adviser. They're sitting in their office and they're saying, "Well, I'm the expert on this case.

I'm the quarterback. I've got this." Yep. And in their own way they're right. Both of them are the experts. Yep. To some extent. Okay.

But I believe that there is within that context, I think there's a bold pride that needs to be removed because when it's there, the client is the one who's going to get screwed and hope they don't, right? But they don't know what to say to either of those professionals in that one could be doing something wrong. They don't know what it is until it's too late generally and sometimes they never know. Mhm.

Yeah. Spell, we've reviewed tax returns that are years and years old and we found issues and it's too late to go back. Yeah. Right. We don't have the luxury because too much time has passed and we can't go back and fix it. And sometimes those are big mistakes, very costly and it's unnecessary, but it's because there are egos and everybody wants to be in their silo and sometimes they just don't want to work with each other.

But the fact of the matter is, if you care about your client, you care about the result, the outcome for that client, and you're doing what you say you'll do for the client, then take your pride, throw it in the trash can, and work with the other professionals, whether you want to or not. Right? Your client is depending on that. That's the way I see it.

And I think that's more than valid. Not only is your client depending on it, the client is paying for it. And when they're paying multiple people, yeah, they're paying dearly in most cases, right? They're spending a lot of money between those. Forget the attorney for a minute. Yeah. If we've got an attorney, we got that third prong sitting in here, then that's one more cost, right?

In fact, right before we started filming, you heard me on the phone with an attorney in Raleigh, North Carolina, working on a case for one of our clients, and you heard him say, $15,000 is going to be the number for this CA for this situation. It's an acquisition and you heard the number. There's 15 grand right there and who knows what the CPA is charging and who knows what the wealth advisory team is charging and so all that together, right, and that's a lot of money.

It's a lot and someone has to come to the table and coordinate all that. And I don't believe it should be the client. I think the client's paying for that and expects that and sometimes unfortunately assumes that. Yeah. Yeah. Only to be victim to lack of communication and they find out when it's too late. Yeah.

We'll get right back to today's show, but first I'd like to ask you a quick favor. If you're enjoying this episode, hit that like button and make sure that you're subscribed to our channel so you don't miss what's coming next. And hey, if something in today's episode has you wondering about your own financial plan, why not get a second opinion? Visit omnistarfinancial.com to schedule a consultation with one of our team members. It's [music] quick, it's easy, and it could make a huge difference in your financial future. Now, let's get back to the show.

All right, I'm going to put myself in the seat of the viewer again just for a second, and I want your thoughts on this. A lot of people may say, "Well, hang on a second. OmniStar, the advisor, the wealth manager, came up with this backdoor Roth IRA strategy. Client would have never known about it had the adviser not brought it to the table. Because the adviser brought it to the table, it's the advisor's fault." What do you think about that?

I think that it'd be easy to go down that path. Yeah. It'd be easy to say that, well, it's the advisor's fault. The fact of the matter is the adviser is not the one putting together the tax return. Yeah, there you go. The CPA is, right? And the CPA is doing one more thing. The CPA is signing that tax return and they are attesting to the information given to be correct.

Now, someone right now might say, "Well, that's right. They're just working with the information they're given." They also say that if they're going to put together that tax return beyond a reasonable doubt, they understand the information they're given. And if they don't, they should ask, right? So, if they receive a 1099 that says, "Here's a distribution," and they don't know how to read it properly and it's a 40-year-old. Exactly. And they don't see anything else unusual on that tax return.

I believe that you don't lay blame. I believe you ask questions. I 100% agree. I think you get your head out of the sand and you say, "Wait a minute. Why is a 40-year-old making a $20,000 distribution or whatever the amount was? Why are they doing that at 40 years old and nothing and they're earning there a million dollar? They got a million dollars of income and they're making a dist." So that to me says the professional needs to mind their lane and mind it well.

I agree and observe what's going on around them versus, Spell, you talk about, we've had this discussion plenty of times. You get in a lane and forget your surroundings and you just get so focused on the one thing and almost myopic. All you're doing is focusing on finishing that tax return, you're going to miss things. You got to be thinking objectively. So there's bean counters, the people that just get the stuff on the return, but someone needs to be looking at that, right? And questioning what doesn't seem normal. Mhm.

Because when someone, and one other point to that tax return, why would they have a $20,000 or whatever it was distribution on line four when not too many lines away from that there's a 40 or excuse me a $70,000 contribution. Yeah. To a qualified plan. That doesn't make sense. Why are you putting all that money in, pulling it out, and you're making all this money? They have plenty of income. Yep. And one of their goals is we're trying to avoid tax. Right. Right. At least ask the question, are you sure? Is this right? Yeah.

Why isn't catching that type of thing literally the CPA's job? That's what they're being paid to do, is it not?

I think it is their job, but I think the problem sometimes, Spell, is their job is also to get that tax return to the finish line, get it filed on time. And that's usually what a client or what a taxpayer wants them to do. Hey, I don't want to be in trouble with the IRS. So, Mr. CPA, here's all my stuff. Can you get this thing done? Let's get it done by the deadline. I don't want to file an extension.

And even if you do, there's still a deadline. Y and even if you file the extension, you still have to pay the tax. Yep. So you don't get to delay that part without a lot of penalties. Yeah.

So I think the CPA sometimes is saddled with this demand to get it back. They're given everything sometimes last minute. True. In their defense. That's true. And then they're expected to work magic and turn this stuff out quickly. Yeah. That puts them in a bad spot.

See, sometimes I agree. But there's no excuse for having all the information and rushing through it to the extent that you miss these things. I think it's incumbent, mhm, on whichever professional is involved to look at those things and ask those questions. Yeah. And if you don't believe that you can give that return or whatever it is you're working over that client, if you can't give it the due diligence that it deserves, then tell the client, "I can't get it done. Let's file the extension whether you like it or not." I agree. That is what the advisers should be doing.

Yeah. And if it's our fault, if we screw up and we mess up a conversion or we mess up a backdoor Roth or whatever it is, we're going to step to the plate and own that 100%. We don't want to, but we're going to own it because if we don't, I don't think anyone, whether we might not want to admit it, but if anybody has half a brain, they're going to say, "You can admit it if you want to, Mr. Adviser, but we know this is your fault." Yeah. So, we're going to look even worse if we don't.

Fact of the matter is, we try our best not to make those screw-ups, but we're going to own them when we do. And we're going to call others when they do. Not to make anyone look bad, but our job is to support the client. Our job, we work for them. That's right. They don't work for us, right? We get to collect the fees. The CPAs collect the fees. We get that and in return we are supposed to be looking out for them in the capacity of a fiduciary to make sure they get what they deserve. Yeah. In the discussion.

And so in this case, as I said, and I'll say it again, I've never met the CPA. They're in another state as is the client. Mhm. But I don't think anything was done wrong on purpose. Yeah. Yeah, nobody was doing this to harm anyone, right? This was just poor oversight. We just missed. And it doesn't have to be that way. And here's how you avoid it. You have meetings every year where we can actually get to the CPA.

That is a problem. Yes, it is. As you know, part of what we believe in is every year end of the year, we want to talk to those CPAs and come tax time, we're making sure that we're having a conversation with them. And sometimes we do it with the client. Sometimes it's just us with the CPA. But we're putting forth a lot of effort to make that happen. Yeah. We can't force them to talk to us. And sometimes they just don't want to. It's true. It's true.

But, Phil, you bring a good point. And someone at home, I think this may resonate with a lot of people that are listening. They may say, "Well, gosh, guys, [snorts] I've got four professionals on my team. I've got an estate planning attorney. I've got two wealth advisors and I've got a CPA or maybe it's some other variation of those types of professionals, but I've got four people on my team, for example. How do I get all of them on a call? How do I coordinate that? It seems like it'd be really, really difficult."

Well, first, you probably have one too many people on the team. You probably need to reduce that team. Yep. And second, someone needs to own the role of the quarterback. Yeah. And it's not the client, right? The client should not be the one saddled with that because, and here's one of the reasons why, every time that client picks up the phone and calls someone, they're probably getting billed for it, particularly if there's an attorney involved. But someone should own the role of quarterbacking all of that.

So number one, that client ought to look for whoever their advisor is or CPA, someone who welcomes, someone who endorses working with other professionals, someone who believes in coordination because wealth and the management of it is complicated. Rules change all the time, every year. I can, yeah, man. I can go back through my career and count several times where implications of tax code change caused a lot of problems. Yeah. Those implications were major in some cases depending on the size of wealth. Mhm. I think someone has to own that and that person is responsible as part of their contractual obligation to the client. They're going to pull all that together. Yeah.

I would say there's one more layer to this. If you have people on your team that don't want to agree to annual meetings or to planning sessions with your other professionals, yeah, you probably ought to fire them. I'd agree. You've got the wrong people.

That's like saying to your surgeon and the team of people that they work with, that's like you feeling as though you have to say to them, "Hey, by the way, will you coordinate with all the other people in the OR? Will you talk to them?" Yeah. That's a given. It's like the surgeon saying that they don't want to work with the anesthesiologist. Come on. Yeah. It's a given. They don't have that luxury. Yeah. Whatever their issues are and whatever their pride points are, you get rid of that. Absolutely. And you come together because at the end of the day you're trying to create an outcome for the person paying you and that is the client in this case.

So yes, I think they have four on the team. They probably have one too many. Two, somebody ought to quarterback. And three, if those people are not willing, in fact, if they're not encouraging some semblance of a at least annual meeting to be sure everything is coordinated, to make sure everything supports the next thing, to be sure that nothing is being a stone is left unturned should never be an option. Right? If those kinds of things aren't happening, Spell, you probably have the wrong people on your team.

Why doesn't the industry work this way? It seems painfully obvious to me that this is how the industry should work because when you have the CPA and the advisor and in some cases the attorney at the same table, they're able to communicate and in this case probably save the client that major headache of having to listen to the adviser and the CPA say, "Hey, there was a mistake on your return from whenever it was, and by the way, it cost you $8,000." Why doesn't the industry work this way?

Yeah, the bifurcation or the disconnect has been there since I started. I've seen this problem for decades and I don't know that it gets better, Spell, because I think the intentionality is void. I don't think it's there, with the exception of a few who get it and they say unequivocally, and regardless of what it takes, we're going to coordinate.

And when the coordination is missing, those advisers are willing to say, you know what, I'm going to have a conversation with the client. I'm going to let them know you're taking the risk here because we can't coordinate something with the others. They're not willing, then you have a decision to make. Know that you're either going to end up in a position that was avoidable.

Yeah.

Meaning, you're probably going to pay something that you don't have to pay.

Mhm.

And that's just the nature of the beast because we're not coordinated.

Yeah.

Or you need to consider hiring someone who is amenable to this kind of coordination.

Yeah. Right.

We've seen this pain point play out so many times through the years. It's one of the greatest problems that's never been fixed. And part of it too, Spell, you said, why is it the case? Well, CPAs run their own shop. Now, a CPA can own a wealth management firm, but a wealth management firm, unless they're a CPA, can only have 49% of a CPA firm. Isn't that interesting?

Yeah.

Isn't that interesting? Now, we didn't love that when that rule came out years and years ago, but it's really interesting. And some CPAs are okay playing in this space, but a lot of them just say, "I don't want to. I want to focus on the tax side, and that's it."

Yeah.

Wealth management firms, they're tiptoeing into the other part of that space. They're moving into the tax planning space. And I think that's a good thing. Attorneys, that's a different world, different animal. The CPA nor the wealth advisory firm. We can't take any of those dollars. We can't share right there. There's no reciprocity or rather sharing of those dollars. That's not allowed, right? And that's a good thing.

That is a good thing.

But you see, there's really no motivation, right, for these people to want to work together. Everyone just works in their silo. They all believe they're the expert. And I believe that fails the client because that lack of coordination exists.

So it's so important. You think about our professional advisory boards, Spell, we don't just have good people who have agreed to do the right thing. We have people who are willing to take the phone call when it comes in.

Yeah.

They're willing to consult with the client whenever that time comes, regardless if they get them as a client.

Yep.

We've put together something that allows the client to know there is coordination there at all costs, and we're willing to put that in writing.

Yes, we are. And that's different.

It is different. That's different. I think more of that needs to happen.

Yeah.

And one day it probably will, because the liability will only get larger as things get more and more complicated.

It's true. Phil, give me your honest answer. How often do you actually find stuff like this? Mistakes on tax returns. Once a year, once a month. And I know it may be different based on who it is that we're working with. A lot of our current clients, probably not finding a lot of errors, but newer clients or potential clients. How often are you finding these types of errors?

I see mistakes on tax returns a lot. Not necessarily a backdoor Roth or a distribution.

Sure.

Missed deductions, not getting the right things on a Schedule E, things that are related to the investments, not getting all the reports to the CPA, or the CPA missing some of them, not getting them, knowing full well that they have them, but they just didn't get them on that schedule. So, sometimes a client gets a break, they underpay, but if that gets caught, you got a problem.

Yeah.

So, I see mistakes often, but fortunately, where I see the mistakes more, Spell, and I think you could agree with this, it's the pre-planning phase. It's when we're working towards tax return season, we're talking to people, we're talking to the client, we see what's going on, and we're questioning things. When we're building the plan, if you will, when we're going through what that tax return is likely going to look like.

Yeah.

We get a chance to see the finished product before it's finished. And that helps because we can see things that may or may not make sense, or things that we weren't expecting. Why is it showing up? All of that matters.

How often do people in this industry do exactly what you just said?

Well, it's a big part of our business, and I'd say the reason it is is because others aren't doing it. So, I can't answer that specifically, like I think the answer that you want, I can't give it because I don't know, but I can sure tell you that we have opportunity every year to do tax planning for a lot of people, and it's because no one else is doing it.

Okay, that's a good enough answer. I think that answers the question indirectly. It's fine. All right, Phil. So, someone's watching this right now. If you had to give them one question to ask their CPA after they watch this, what question would you tell them to ask their CPA?

Narrowing it to one question is hard.

Mhm.

But I think if I'm interviewing a CPA, or if I already have this CPA, I think logically: are you willing to meet with my other team?

Yeah.

And if you are, what would that look like? How often would that need to occur? When would you think it should occur? And is there an extra cost for me for you to do that? There shouldn't be. That should be built in to the framework. Most of these CPAs charge subscriptions these days, right? And it should be built into that.

Okay.

But you ought to be asking, are you amenable to that? Or are you dealing with a CPA who wants to hold everything close to the vest and believes that they are the end-all be-all?

Yep.

And I'm happy to report that there's plenty of CPAs out there who believe in working with other professionals. We work with them. They're out there.

Oh, they're out there.

And I know because my email inbox is full of correspondence from the CPAs daily.

Yes. Daily.

Yeah. That's how it should be.

Yeah. Right.

They should be open. They have a lot of information. They have all the information as it relates to your taxes.

Yes.

So all of that information, and the more it's shared with the people on the team.

Okay.

I believe that when you get multiple sets of eyes, assuming everyone's trained well, you're going to get a better outcome.

All right. So I asked that question to my CPA, or my adviser, you could ask that to your wealth adviser. What does a good response from that person sound like?

Well, I think that the easy answer here is that they would welcome working with another adviser. That they're not a prideful person. They are a person that says, "I want you," and if their answer is this, "I want you to get the best outcome."

Yeah.

So, whoever's on your team, I'm willing to work with them. I'm willing to talk with them. I'm willing to coordinate with them.

Mhm.

And by the way, I'm even willing to tell you if I think they're doing a poor job. That's the level of candor and honesty that you need from every professional on your team. If they're not willing to give that, you got the wrong person.

Yeah, I agree. What does it sound like if that person's trying to dodge?

It's probably a termination letter. You need to get rid of them. And if they're dodging that, that means that they don't play well in the same sandbox with your other professionals. Not good.

Yeah.

Or it means that they want to control everything. Not good. Because not any one person has all the right answers.

Yep.

And I think every professional ought to appreciate that and realize that a lot of professionals out there have a lot of really good ideas.

Mhm.

You think you've got all of them? Spell, when I went through flight school many, many, many years ago, I remember my instructor saying to me, if you ever feel like you don't need the checklist, get out of the cockpit, because you're going to die.

Yeah.

And I think it's the same in the professional realm of wealth management, tax work, legal work. If you believe you've got all the best ideas, you know the book by heart, so to speak.

Yeah.

Or by rote.

Yeah.

You probably need to move, a long time for you to get out of that business, because you're going to screw up and probably screw over a lot of people. Maybe not intentionally. It's going to happen.

Yeah.

Because I don't think any one person has a monopoly on great ideas or application.

I agree with you.

Yep.

Last thing, Phil. Which two of the 10 Elements were coordinated, or maybe not coordinated, in our conversation today?

You got me on the curveball train here.

Well, that's what this whole series is about.

Yeah. So, our 10 Elements.

The 10 Elements. That's right.

Our 10 Elements being coordinated, so important. Actions in one, we always say, affects another. I'd say in this one, I guess off the cuff, we'd have to be talking about tax planning, retirement planning, and maybe you could throw investment planning in there, but really tax planning, retirement planning, right? Those would be our two.

That's it.

Yeah.

Nice.

So important to talk about those elements. And I think for any of our listeners, and Spell, you talk about these things a lot. In fact, you probably talk about them more than anyone in the firm, but the elements are so important. Wealth management, tax planning, legal work, philanthropy, all those things. There's so much to it today.

Yeah. We have six sub-elements with each of the 10.

For sure. Oh, yeah.

Oh, yeah.

And we know that's only a part, but that's 60 things that a person has to keep up with.

Yeah.

To be sure that their planning is well coordinated and they're getting the right amount of each.

It's true. It's a lot to think about.

And in this case, we only touched on two.

Two.

And by doing that, by coordinating them, we found $8,000 for a client. It's enough for them to offset some fees that they're paying to some of these professionals. And frankly, Spell, I think that's what we're supposed to do. I smile when we're able to save our clients money like that.

Yeah.

Because it means we're actually doing the work that we promise to do.

Yeah.

And I think that affords them, hopefully, a better outcome.

Yeah. Well, I'm glad that you were looking at a tax return. $20,000 transaction cost the client $8,000, and it should have cost him 153.