Welcome to the New Planner Podcast, where it's all about helping you successfully enter the financial planning profession and accelerate your financial planning career. This podcast will help you understand the profession, become familiar with the various career paths available to you, and avoid the mistakes that limit your success. Join your host, Caleb Brown, to explore the human side of creating a successful planning career through interviews, personal experience, and insights from the trenches. Let's get started.

Caleb Brown: Welcome to the 223rd episode of the New Planner Podcast. This is Caleb Brown, your host. My guest today is Steven Jarvis, who is the CEO of Retirement Tax Services. Steven joins the show today to share why he didn't follow his brother and his father's footsteps and pursue a career in financial planning, but the accounting and tax prep world instead.

Steven shares his journey from working for a big four firm and then leaving as he was about to make partner to open his own tax firm that focuses specifically on helping financial advisors work with their clients. Stay tuned for his insights on where he thinks most advisory firms are lacking when it comes to tax, and some ideas on how to strengthen the tax expertise of the firm, plus how he works with firms and adds value to clients. I hope you enjoy this episode with Steven Jarvis.

Hey Steven, welcome to the New Planner Podcast.

Steven Jarvis: Caleb, so excited to be here. Thanks for having me.

Caleb Brown: Absolutely. Thank you for making a few minutes for us. Hey, I just want to start. I mean, I was looking at your background and just talk to us why you went the CPA route instead of the financial advisor route, and then walk us through sort of how you got involved and to where you are today.

Steven Jarvis: Yeah, happy to. Yeah, when you kind of look into my background, my family background, it's definitely a fair question. I grew up around financial planning. I have a brother who followed my dad into the industry, and then I kind of went a completely different route and I would love to say that there was some grand plan behind it all, but the reality was that I was in my early 20s and it was kind of this combination of, well, I don't really just want to copy everyone else, but numbers kind of work for me. I started going to college too. I thought I had to, and I took an accounting class and looking around the classroom, it's like, “Oh, this is super confusing for everyone that's not me.” And this was 2007, 2008. It kind of felt like no one would ever get a job again. So it's like, “Oh, this is easy for me. And there's lots of jobs.” And by the way, your accountant's your last person you can fire when you're going out of business. Like it was totally a practical place for me. And so I went, I became a CPA, went accounting for very stereotypical, practical reasons.

Caleb Brown: I love that. Yeah. So you carved and found your own path, it sounds like.

Steven Jarvis: I did. I went and got my accounting degree. I got licensed as a CPA. I did very stereotypical CPA things for a long time. I worked at big national firms and then really kind of carved a new path doing this whole thing where I work alongside financial advisors.

Caleb Brown: And talk to us about, you started in one of the big four firms or the big accounting firms. Is that right? One of the big shops.

Steven Jarvis: Yeah, I did almost eight years at BDO. They're the fifth largest accounting firm in the world. And then I did a couple of years at Clifton Larson Allen, which is a top 10 national firm.

I was on the partner's track there, actually would have become a partner at Clifton Larson Allen if that–the same year that I decided and said to quit and start my own company.

Caleb Brown: Talk to us about that. I mean, life is great. I mean, like, why did you take that massive risk?

Steven Jarvis: That's a good question. I'm now four years into it actually. As we're recording this, it was almost exactly four years ago that I already have the meeting scheduled with the chairman of the board of directors. Like we were just checking boxes. I was going to be a partner. And I think honestly, that actually contributed to my willingness to try something new was because I'd proven to myself that I could do that.

Only like 2% of accountants who go into big national firms ever become partners. And so I was there, I got the doorstep. I was accomplishing every CPA's dream. And then for a few years leading up that, I'd kind of seen kind of some signs that maybe that wasn't the best fit for me. I just didn't know what the alternative was.

And so about this time, four years ago, a couple of financial advisors came to me and basically said, “Hey, we can't find CPAs who will play nice with us.” And that was the general premise behind starting Retirement Tax Services was what would it look like to have a company that really is dedicated to helping bridge that gap between financial advisors who are certainly having a tax impact, but maybe not being proactive about it and the CPA world that tends to dismiss financial advisors, but the clients ultimately really need a lot of collaboration between the two.

Caleb Brown: And we want to learn more about that, but just a couple other questions on the other piece. I mean, was it all tax? Was that your experience all just doing tax returns with audit, or was it everything?

Steven Jarvis: It was a bit of everything. So that's a common misconception for a lot of consumers, which, Caleb, you're clearly a little more speed than many to even ask the question because there's a reason it's CPA and not certified tax specialists.

The CPA licenses in a lot of different fields, and most CPA firms do work in a lot of different fields. And so I had a range of experiences before I did this. And again, I grew up around financial planning. I actually did back office support when I was in college for, at the time, my dad's financial planning practice.

So I've been pretty exposed to the industry. I was familiar with it and then did a decade in more traditional CPA world before making this change.

Caleb Brown: And then if you would just elaborate a little bit, cause I know we have listeners and some of these big four firms, and then even the regional firms that are looking at this, what were some of the signs that you saw that made you kind of think, man, this might not be the best fit long term.

Steven Jarvis: Yes, there was a few things, and I think there can be a lot of value in starting your career in a big firm. There's a ton of earnings potential. There's a lot of job security. I don't fault anybody who stays there. It's a pretty phenomenal career path if you're willing to grind it out, but there's certainly a grind to it.

It's a different kind of stressful than being an entrepreneur. That's been a kind of a wake up call to me of just what that can be like. But I mean, some of the things for me, I spent a lot of time in the SEC world, which that was just too demanding. I was getting calls on my personal cell phone on Sunday night from CFOs of publicly traded companies who expected me to drop everything, walk away from my family and spend the evening talking about their next earnings release.

And it's like you know what, this just isn't for me. And the trade off to a big firm, it comes with a lot of stability. It's nice that there's a department for everything, but change happens slowly and your ability to impact change is very minimal on a big scale. And so you have influence over the one book of clients that you work with, maybe a few team members in your local office, but in the grander scheme of things, you just have very little influence.

Caleb Brown: Okay. So you left all that, you took the plunge on the setting up this new firm. I mean, just what was it like going from comfortable, familiar, making good money to unknown and not making anything. How was that transition?

Steven Jarvis: It was pretty wild, to be honest. In retrospect, I laugh about it now because as a CPA, I spent my whole career working with business owners.

And so in my mind, it's like, “Wow, I hang out with business owners. I do work for business owners.” In my mind, I'm peers with business owners. I know what this is like. And then I became a business owner and realized I had no clue what being a business owner is. It's one of those things that, I mean, you can watch professional sports on TV, but until you get on the field, it's not the same.

And I mean, Caleb, the first summer was just silly things. Like I would say, “Oh, well, who can I go to for this question?” Nope. Every question goes to me. I have to be the answer to everything. And so I'm learning things about payroll and business licensing and taxes that I'm not much income taxes, but all sorts of things I just wasn't ever familiar with. And then Caleb, the probably the biggest mind trip was the first time I hired someone because I had been involved in recruiting at the big firms my whole career. So I thought I knew the hiring process, but it's different when I'm offering someone a job.

In the back of my mind what I'm really saying is, “Hey, Caleb, not only am I offering you a job, but somehow I'm promising you this business is going to continue to grow. And I'm going to be able to continue to make payroll.” And there's that piece of me that's still not sure, like is this going to be successful? And so that's a whole new kind of stressful.

Caleb Brown: I'm with you. I can relate to that. I mean, it's like a lot of pressure, right? That person's relying on me to make this happen so they can feed their family. So, but I think, I mean, it's like I'm talking about an ultimate motivator. I mean, you have your own family, you have to, but that's a pretty good motivator, right?

Backs against the wall. And a lot of people have done a lot of good things when their back is against the wall. And talk to us a little bit more about the business. So what is it consulting for–are you doing taxes for individuals and then also helping advisors? Maybe just talk to us about that.

Steven Jarvis: Yeah. So at this point, the business, it's really kind of in two lanes, but maybe we'll talk about it in three because it started with the idea of let's help advisors do more with tax planning.

And if I'm going to talk to an advisor about tax planning, we also need to include the execution and reporting side of that. And so we provide a lot of resources for financial advisors. I get on a lot of podcasts, I get on a lot of stages. We do monthly newsletters and resource guides and handouts, all of these things to try to just make it easier to execute the tax plans to talk to clients about the tax planning.

In addition to that, this year we'll do about 550 tax returns all for taxpayers who have a financial advisor in our program. So we only work with taxpayers who have a financial advisor and that's very much by design. I want to be a tax specialist and so I don't want to have to worry that my client isn't getting any help on investments or insurance or whatever else it might be because if they don't have a financial advisor, they're inevitably going to come to me for all those things that I'm not an expert in all those things.

So we're able to focus more specifically on the tax piece that we're really good at and make sure the clients are taken care of. So we have the resources we provide to advisors. We have the tax prep and planning we do for consumers, for taxpayers. And then the third piece that is aligned with what we do for advisors, but has grown rapidly is that we do an annual event for financial advisors.

It just got named on Kitces’ list of top conferences. There'll be about 300 advisors there this year. And there was another thing I had never done before was put on live events, and it's a whole game of its own. So even though it really falls under this providing great resources to advisors, man, throwing live events is quite the experience.

Caleb Brown: Okay. Got it. So I'm out there. I'm Caleb Brown. I'm looking for someone to do my taxes and I find you online. I reach out to you and you're going to say, “Nope, I'm not going to prepare your return because you're not with one of my financial advisors in my program.” Is that what I just heard?

Steven Jarvis: Yeah, so if you Caleb Brown as a taxpayer, reach out to me, and this happens semi often. At some point, we will be a little bit more intentional both about what we do with those leads that we're inadvertently creating right now, but yeah, I'm going to send you a really nice message that says, “Hey, Caleb, we do our best work when we work alongside a financial advisor. So if you have a financial advisor who's interested in learning more about us, I'd be happy to talk to them. Or if you'd like to get connected with a financial advisor, I'm happy to make an introduction.” But for us, that's not like a set sales process where I'm then dripping on them or trying to pressure them into working with a financial advisor.

It's more of a, “Caleb, if you'd like an introduction, great.” And we've had a couple that have toxic financial advisors out of that, but that's not our primary focus right now.

Caleb Brown: And then how many people are helping you? The 550, that's a lot of returns. Like how many people are helping you with that?

Steven Jarvis: Well, whether or not that's a lot of returns depends on who you ask because I know–

Caleb Brown: To me, that's a lot.

Steven Jarvis: I agree. I'm with you, but I know CPAs who will personally view 800-plus returns themselves. Sometimes maybe with an admin, but this is why the CPA industry really needs to change is that it's based around billable hours. It's based around grinding it out. It's this badge of honor that I worked 90 hours and didn't sleep.

That's all nonsense to me, but it still happens quite often. So my goal is that our ratio of preparers to tax returns is more like 300 to one instead of 800 to one. And so for this filing season, where we'll do about 550 tax returns. I have another CPA on my team. I have another tax preparer who's working on getting his enrolled agent designation.

And then we have a couple of contractors that help us well just to manage capacity because we want to provide a very high quality experience. And then we're doing other things throughout the year because we're also very focused on getting. As high a percentage of our returns done by the April 15th deadline as possible.

So if another trend you're seeing in the tax world is, “Hey, let's extend everybody.” But that makes it hard to do tax planning. So we'll get to probably about 85 or 90% of our returns will be done by April 15th. And the ones that have to wait. Are not because of our capacity. It's because they're waiting on a K-1 or something like that.

Caleb Brown: This is interesting ‘cause the trend I've seen over my 20 years in the business is CPAs, like getting into the thing like, “Oh, we're seeing all the dividends and the interest and we see the client's income.” Like ooh, and we've sometimes a lot of times they see the brokerage statements, they see the assets like, “Hey, we can manage that for you. You don't need X, Y, Z, financial planning over there. We'll do that.” And so it kind of sounds like you've gone the other way and carved out your own little niche. So if I'm a financial advisor and I'm having trouble finding CPA. I mean, here's a complaint I always get, “They won't ever refer me clients. I send them business. They won't send me any business.” And I'm looking, I joined your program. What do I get and how much does it cost?

Steven Jarvis: Yeah. Great question. A couple of thoughts on that. And if I don't answer the question, please ask it again. So I'm not trying to dodge it, but there's just a bunch of thoughts going through my head.

One, is that's actually a topic we work with advisors on is, “Hey, how can you get more referrals from CPAs?” Which is a little bit ironic because right now I don't really send referrals. But I've worked with so many advisors that I've seen what this looks like in practice when it does work.

So in general, advisors come to us either because they can't find CPAs, so we'll play nice to them. They're not sure what they can actually talk about on tax planning, either from a compliance standpoint or because they're just new to it. They're like, “How do I explain a Roth contribution to someone in a way that makes sense to them?”

We also get a lot of advisors who come to us who honestly are really tax savvy, but they don't want to have to spend time figuring out what they should stay up-to-date with. So we have advisors in our program that probably could run circles around me on certain tax topics, but rather than stay on top of themselves, they come back to us every month for a newsletter to say, “What should I be putting in front of my clients?”

So we had two different memberships. One is what we call essentials. And this is advisors coming to us who want to do more on tax planning, but aren't looking for one-to-one help. So they're getting access to webinars and newsletters and reference guides and handouts, things that will make their life easier and help them learn the tax planning topics.

I would have a couple of masterclasses included in there and that membership is $197 a month. Now, our other membership is what we call our premier membership. And this gets advisors a lot more access. It allows them to use a lot of our materials as white label that they can put their own logo on it and use it for client-facing things.

It also gets them access to twice a month office hours that they do. So they're getting direct access to a CPA who speaks their language and who knows the types of planning they do. Actually, that's one of my favorite things I do is getting on those office hours with advisors, hearing their clients’ specific situations.

These aren't necessarily clients that you didn't work with and saying, “Hey, from what you've told me, here's how I move forward.” So that's a huge value add for the advisors. Those premier members are also the first ones we go to when we have capacity for doing more tax returns. So those are the advisors who are getting access to our tax prep capabilities as well.

And that premier membership is $497 a month. And then there is a per tax return costs. We were pretty narrowly focused on who we work with. So for the most part, our tax returns are for individuals and families, a lot of 1040s and the cost ranges in the 800 to 1,300-dollar range.

Caleb Brown: So no businesses mostly, or is businesses included there? If the client has a business.

Steven Jarvis: if they're doing a side hustle, a small schedule Cs, very minimal work that we're not doing any bookkeeping or payroll, then we'll help people out with small schedule Cs. We do about a dozen S corps right now. And that is an area that, well, we have a lot of people asking us to do more in, and as we build the team out and have more people on a team who can do those types of returns, that's a service we'll start offering cause there's so much need for it.

But right now, if we do more business returns, that means I'm personally doing them. And when we look at all these different areas of the business and then running the business itself, like I'm not personally volunteering for more tax returns.

Caleb Brown: Welcome to entrepreneurship one on one, right? It's hard to scale and do all this and run the business when you're in the trenches, doing all the work.

Very cool stuff. Okay. So it sounds like there was two programs. One, it was kind of a more of an entry level and sort of just you get access to this information. The second one was a little bit more hands on. Let me ask you a question about the office hours. Do the advisors, do they ever get their clients and have them talk to you? Do you ever talk to the end client?

Steven Jarvis: Not on the office hours. For the clients that we prepare tax returns for, absolutely. But in those office hours, so if you're an advisor, if you're a premier advisor, you come to those office hours. You can talk to any client you want. So I'm more than happy to weigh in at. Of course, I include the caveats of, “Hey, Caleb, keep in mind that I haven't, I've never worked with this client, there might be other contexts you need to be aware of, but in general, here's the direction you should go.”

We'll have a group of advisors there. So advisors will be learning from each other as well, but no clients.

Caleb Brown: And then maybe just step back for a moment. Just where do you see all this going? I mean, the tax and the compliance and I sort of know where I feel. I mean, I've mentioned this several times on this show.

Like every time I talk to a client on the financial planning firm about something, there's some sort of tax implications somewhere. It might be one or two removed, but there's something there. So where do you see all this going? I mean, this is like more complicated, more complex, more value for financial advisors. I mean, I think I know what you're going to say, but maybe just, what are your thoughts on that?

Steven Jarvis: Well, as we're recording this, I mean, the proposed legislation from the new administration is flying fast and furious. And so it's from a really high level of where tax laws are going, my crystal ball is as broken as yours.

I am not worried that I'm getting put out of the job. Like I'm not worried that they can actually disband the IRS and the tax code is going away. What that means for advisors, though, regardless of what changes happen, most taxpayers are going to benefit from consistently doing the simple things over time.

So I wouldn't get so hung up on whether they're going to change how 1031 exchanges work. Let's just talk about, “Hey, are your clients constantly surprised at tax time? Do your clients have any idea why they have capital gains distributions out of their taxable portfolio that you're getting blamed for a tax bill every year?”

Let's start with the simple things. And that's where we're spending a lot of time working with advisors is let's pretend for a second that you don't think you're doing any tax planning, which even the way you described that, Caleb, I mean, you're already aware. But a lot of financial advisors miss this.

That you can tell me you're not doing tax plan and I will call you a liar every time because every money decision has the tax impact. It's just whether you're being intentional or not. And so we spend a lot of time working with advisors on that. And so I do see a huge opportunity for advisors to be ahead of the curve and how to be a differentiator because probably in the next five to 10 years, it's going to be table stakes.

And the reason I say that with confidence is I just got books for my first speaking gig with Edward Jones on tax planning. So I'm a huge fan of what a lot of people do at some of these bigger firms. Like I think there's good people everywhere. But that used to be for people in the more independent spaces.

“Oh, well, they can't even touch these topics.” That is changing. You can't just assume that by default you're doing more. You have to be proactive and intentional.

Caleb Brown: I like you said something earlier. You said something like maybe the lens you need to look at this through. And I know there's advisors out there.

It's like, are your clients constantly surprised about their tax situation when there were–I mean, I think that's a really good sort of okay, they are, that's bad. You're not doing your job, right? You need to beef up your own knowledge or hire someone like you or get somebody else involved.

So you mentioned earlier, CPA, EA, the newer planners that listen to this that maybe can't get a subscription with you or their firm won't let, or they can't afford, whatever it is, what do they need to be doing, which is some basic advice for how they can improve their basic tax planning and tax knowledge?

Steven Jarvis: Yeah. A couple of things, a shameless plug, follow me on LinkedIn. I do my best to put out quality content. It's not just, “Here's the first 10% and pay me or you can't have anything interesting.” I really take the approach because the next recommendation I'm going to give you, I really take the approach that I learned from Michael Kitces, of give away as much as you can for free and then there's still gonna be people who want to pay you for the rest. And then kitces.com is the other one that there is so much great information out there that you can get for free that's going to help you as you get started on very specific topics.

The other thing I'd say, especially for newer advisors, is that what counts the most is getting the reps in. So ask clients for tax returns and start going through those tax returns. Print a physical tax return, have the tax return and a blank sheet of paper and just start writing down everything you could learn about this client if you never had a conversation with them just from their tax return.

And if you're not sure how you even start with that, print your own tax return and say, “Hey, if I took my name off of here and it didn't say Caleb Brown at the top, what could I learn about this person?” And you know your own situation so you're going to start seeing, “Oh, the tax return is a wealth of information and the more comfortable I get with it and the more I can explain it to myself, my spouse, my team members,” you know, go through this with people.

I would recommend to do that. Even if you can't afford to become an RTS member, do that first. That's more important than any subscription I can give you. You have to–I tell people this all the time. You still have to do the work. I can't take away all of the work. I can just point you in the right direction and get you there a little bit faster.

Caleb Brown: Thanks for sharing that. And I mean, are you seeing a trend of more financial advisors pursuing, maybe not a CPA designation because that's a bigger undertaking, but like an enrolled agent or the new tax certificate program? I mean, are you seeing more people do that?

Steven Jarvis: I mean, I don't have data behind it, but anecdotally, it seems like it. The one thing I'll say is that like anything else we want to do, we've got to be intentional and not just chase the alphabet soup. Because designations can be great. If the designation is the only way you're going to sit down and go through the materials, fantastic, please get your enrolled agent designation.

But if your idea is that the enrolled agent is going to somehow magically make you better, it's no different than any other designation. What matters is what you do with it. So if you want to prepare tax returns or represent clients in front of the IRS, which is not what most financial advisors want to do, then you should absolutely get the enrolled agent designation. If all you're looking for is to learn more about tax planning and get more reps in, you can do that without getting a designation and consumers don't really know what an enrolled agent is. And so there's not really a marketing or credibility boost from becoming an enrolled agent. The CPA designation get that in spades, but that's a much bigger lift to get the CPA.

Caleb Brown: This is all great info. And I appreciate you sharing all this as we wind down. I mean, it just over your careers are like a number one mistake that you see these financial advisors making out there, or, I mean, I know there's a lot. I mean, besides lack of planning and just lack of just kind of ignoring a lot of this, but like, “Oh, I just, I see this all the time from financial advisors and it just drives me bonkers.” Is there anything out there like that?

Steven Jarvis: The first thing that comes to mind is not realizing that every money decision has a tax impact. And related to that, it's assuming that your client is covered on taxes because they have a tax professional and we don't have time and it wouldn't be productive to try to get into a debate about whether the CPA and EA should be more responsible or whether the financial advisor should be more responsible.

The reality is that most tax professionals are really focused on the rear view mirror and grinding out tax returns. So again, you can have that debate, but your client loses. As a financial advisor, take responsibility for the planning that you're doing and recognize that there is a tax impact and that tax planning only counts if it's reported to the IRS correctly.

Caleb Brown: Got it. Well, this has been great, Steven. Any final comments or anything you'd like to leave the audience with before we close it out?

Steven Jarvis: A reminder, I always love to give people on tax planning is that this isn't like a wink-wink, nod-nod, let's see what we can get away with. You should pay every dollar you owe, but there are no patriotic awards for tipping the IRS. So make sure we have a proactive, intentional plan and that we're consistently doing the simple things over time.

Caleb Brown: Thanks so much for coming on, Steven.

Steven Jarvis: Absolutely, Caleb, it's been great.

Thanks for joining us for this episode of the New Planner Podcast. If you are ready to discover the top career paths for financial planners and see which track is best for you, we created a free guide to help you. Grab your copy of the Financial Planner Career Roadmap at newplannerrecruiting.com/roadmap. There, you'll also find more tools and resources all created to help you build a successful financial planning career. Tune back in next week for another episode, and until then, we are here to help you succeed.