I am fortunate that my father started teaching me financial concepts at a very young age. I still remember the day he taught me the basic lesson of counting change and the difference between a penny, a nickel, and a dime. As I entered my teenage years, he covered the realities of adulthood, and reiterated many times the importance of knowing an attorney, a banker, and a Certified Public Accountant (CPA). Collectively, I call this group the ABCs. Right now, outside of healthcare professionals, they are the busiest and most in-demand people I know. Discussed below are some specific reasons each of the ABCs are important.

Attorney

It is nice to be able to quickly engage an attorney for small legal matters, such as reviewing an employment contract, settling a dispute with a property issue, or drafting an agreement. Most attorneys are specialists or have niche practices, but they have knowledge of attorneys outside of their practice area.

If you need an expert in a certain area, such as a divorce attorney, employment law, personal injury, etc., they likely know the experts in their field and can direct you to the proper person. Second, they can provide a quick resource to give you clarity about whether you even need an attorney—or if there are other avenues that may be better. For example, if a neighbor piles trash on your lawn, is that a call to the city? Or simply a letter from an attorney? Is it a legal matter? Or law enforcement issue? Like most areas, the good ones are in high demand, so it is nice to have an attorney friend or acquaintance to give quick guidance on a personal issue.

Right now, the estate planning and tax attorneys are frantically updating estate documents, navigating the major tax and COVID relief laws that have been recently enacted. They are working through estate settlement issues remotely. They are prioritizing their current clients and taking on new ones as they are able.

Banker

My dad advised me that the worst time to find a banker is when you need a loan. While you could say that loans are now easily available through on-line providers if one has a good credit score, that is true. However, when the Payroll Protection Program (PPP) loans were rolled out a year ago, the customers who had an established lending relationship were generally on the short list to help usher them through the process. We have noticed the local banks to whom we refer our clients offer excellent service. Our clients generally experience significantly less stress when originating loans and refinancing their mortgage.

Certified Public Accountant/Tax Preparer

CPAs are experiencing the greatest time pressures right now, outside of the frontline healthcare workers. Congress has passed three major tax and stimulus bills in the last 15 months, with many provisions affecting 2019 and 2020 individual tax returns. I spoke with one tax preparer who shared some of the challenges she is experiencing this tax season:

• Some tax changes were effective almost immediately. Yet, the Internal Revenue Service (IRS) could not adjust the Form 1040 or applicable schedules quickly enough to accommodate certain changes. The CPAs and tax preparers have had to wait or navigate around some of the recent provisions. I have noticed even the IRS website has not been updated for many of the recent changes. They just released guidance on IRA beneficiary rules from the legal changes fifteen months ago.
• The processing of tax returns has been slowed down or in some cases halted, as the IRS was responsible for disbursing stimulus checks. This CPA indicated that some returns submitted last October still have not been processed.

An argument could be made that tax preparers are no longer needed because of tax software that is readily available. I would agree for very simple situations. However, I have noticed the good CPAs and those with large firms stay on top of law changes. They are generally the first professionals to study the rule changes to apply them to a wide spectrum of clients. CPAs must quickly determine the traps and triggers, as well as the alternative options that may be more beneficial to you.

Our Role

As your financial advisor, we often take the role of quarterback and work with the ABCs when it comes to helping you manage your financial affairs. We are often called on to provide clarity, prevent an unintended consequence, or raise a flag if we observe an action that is not in your best interest. We can also act as the nudge when there is a sense of urgency or lack of responsiveness.

We are always on the lookout for ethical, competent, client-friendly professionals so that when you need one, we have vetted the ones we recommend. We also keep on the lookout for insurance agents, mortgage bankers and other service providers. If you have someone that has served you well, please let us know. The greater our network, the better our ability to serve your needs. As my dad taught me, outside of a financial advisor, it pays to know the great ABCs!

Kristina Bolhouse CPA/PFS, CFP®
Vice President/Shareholder

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