Keeping More of Your Money: Tax-Efficient Wealth Management

It’s more important than ever to align your tax strategy with your wealth strategy. Working with a financial advisor on a solid financial plan is key to achieving your life goals, but it’s just as important to focus on how much money you keep after taxes.  

The Schwab Center for Financial Research recently performed a study that examined the long-term impact of taxes and other expenses on investment returns and concluded that while “investment selection and asset allocation are two of the most important factors, minimizing tax and other expenses” is also a key component to maximizing your returns.[i] 

Maximize Tax-Efficiency by Integrating a Team of Experts 

Partnering with a financial advisor means mapping out a journey that incorporates both short and long-term goals. From buying a home (or a second home), planning for education funding, starting or selling a business, saving for retirement, philanthropic aspirations, or looking ahead at legacy planning, every investor has a unique timeline for hitting the milestones that matter most to them. Along the way, their advisor helps them identify adjustments that can be made to ensure their timeline aligns with their wealth. Investors also work with tax professionals to ensure they are taking advantage of any tax opportunities available. In essence, these are two closely woven relationships that often only intersect during tax season. 

Rather than working independently with these professionals, there are many benefits to opening the lines of communication beyond document sharing at tax time. Some benefits of a collaborative advisor-CPA partnership include: 

  • Personal Life Changes. Often, in the midst of unexpected life changes (a death, a divorce, an illness, a sudden change in financial situation), we are less focused on finances and more focused on our emotional health. A partnership with an advisor and a tax professional means you are supported through any situation and your financial plan is quickly adjusted accordingly. 
  • Career Adjustments. We’ve worked with clients who have experienced sudden wealth from IPO activities or who have executed a succession plan to sell a business. In both instances, taxation can leave a sizeable mark on returns without proper planning. 
  • Retirement Planning. Anyone on a fixed income, no matter their assets, understands the impact of taxes. Making adjustments along the way in advance of retirement is where an advisor and CPA can excel together to benefit the client. 

Sharing information across parties offers investors the most comprehensive financial support from experts in their field. 

Evolving Your Approach to Annual Tax Planning 

Many people associate April with tax season, but the reality is there are many times throughout the year to consider your taxes and your investments. Your advisor and your CPA working together means expanded expertise on the flow of money and how to best retain your assets against taxation. 

At BerganKDV, our Wealth Management team was created within a CPA firm. When a client gives us authorization, our advisors partner with our internal tax professionals because we understand the importance tax strategy has in financial plan. Our close collaboration with CPAs ensures that portfolios are diverse and designed to minimize tax liability. 

If you’re ready to consider a more integrated approach to managing your wealth and experience the difference it makes in your short- and long-term financial planning, contact our team today.

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Diversification and asset allocation do not ensure a profit or guarantee against loss. 

The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.



CATEGORIES: Tax & Audit | Wealth Management
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