How to win referrals

By Jason Heath | May 17, 2012 | Last updated on May 17, 2012
3 min read

Retirees taking RRIF withdrawals, or those with even modest non-registered accounts, are likely to have enough untaxed income to be called upon by the CRA to pay quarterly tax instalments.

If a taxpayer owes more than $3,000 in tax in two consecutive years, the CRA will send out requests to pre-pay what is essentially the tax department’s estimate of the taxpayer’s current year tax. That estimate is based on taxes for the two previous years and in some cases, the payments should be made—in others, maybe not.

It’s not for an advisor to determine whether or not those payments should be made. That’s a tax advisor’s job. But, as someone who does most of my clients’ personal tax returns and advises them on tax matters including quarterly tax instalments, I would be very impressed by an advisor who did reach out to help in this process.

Tax advisors are typically looking for information on RRIF withdrawals, non-registered investment income and capital gains and losses. Many tax advisors look for this information at each of the March, June, September and December personal tax instalment dates. But they pay particular attention towards year-end when things like capital gains and losses are finalized for the year.

In many cases, tax advisors reach out to their clients, or to advisors directly, for this information. So, why not be proactive and get the information out to your clients or over to their tax advisors in advance?

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Doing this shows you’re aware of the tax implications of the portfolio you’re managing and that you’re keen to be a contributing member of the team. There’s a good chance the client is going to forward the information right to their tax advisor and if that advisor keeps seeing your name, it might just stick in their head the next time they’re looking to make a referral. If you send the client information over several times to a tax advisor, it opens the door to a cup of coffee or a bite to eat to talk shop and see how you can help grow each other’s businesses.

Even if you’re just sending tax information to your client for their own records to help them calculate their own quarterly tax instalments, it becomes one more thing you’re doing that’s go over and above what’s required. It shows you’re taking a holistic approach to their finances, increases your points of contact with the clients, and makes you more referable.

Furthermore, even though it’s contact that doesn’t benefit you directly—it benefits your clients. And, when you give without expecting to receive, it often pays you back. You might end up receiving in the form of referrals from a client or a tax advisor who sees you’re going over and above.

Jason Heath