You always see the articles and such about year end planning for clients – all the tax tips, planning ideas and such that clients need to be reminded about by their advisers. So who is looking out for the small RIA and making suggestions for them at year’s end?
A good starting point may be some of the same items you would raise with your clients: timing of income and deductions, for example, comes immediately to mind. The tax impacts and effect on the business cash flow may be significant and are well worth thinking about over the next couple of months rather than waiting until mid-December. On the detail level, of course, these items will differ somewhat from your advice to your clients but that is one thing you are good at, advising clients on what to do.
Contributions to your tax advantaged accounts should at least be planned if not made by year’s end. Consideration should be given to any anticipated bonus and how that money will be handled. If health care is a part of your firm’s offering or if you have individual insurance, this is an important time to be reviewing coverage and making sure it is in place for next year. This includes addressing the changes inherent in the Affordable Care Act and all that goes with it.
End of year compliance concerns include the upcoming December payment of the annual renewal fees through IARD to the SEC or states and include payments for both firm and IAR(s). It is also a good time to begin to assess what changes will be needed for the annual update of your disclosure documents in the first quarter of next year as well as your annual risk assessment and other requirements. One good first step might be to do the testing you may have put off earlier in the year – examine areas such as best execution, trade errors, personal trading and the like.
With regard to your clients, many small firms time the sending of their annual privacy notice and offer of form ADV Part 2 to coincide with the end of the year. It may also be a nice time for a client appreciation event if that is an approach you and your clients would like. Marketing continues all year long and the holidays may be a good time for a reminder.