Inflation. The housing market. The labor shortage. Cryptocurrency. NFTs. Inflation. GameStop. Did I mention inflation?
2021 was a strange and difficult year for many people, and the constant financial disruptions and news stories didn’t make any of it easier. But while that year is behind us (and most people know what an NFT is at this point, or at least the people who want to know do), we’re continuing to live through the same issues.
My friends and family are feeling it. I’m feeling it. I’m betting you, your loved ones, and your community are feeling it too. Throughout the United States and the world, people are dealing with rising costs of living, a fractured and volatile investing environment, major job and lifestyle changes, and other challenges either brought about or exacerbated by the pandemic.
And then there’s the impact of all that on finance professionals. It’s tax season as of this writing, and those who tend to be busy this time of year are
busier than ever. Many CPAs, CFPs, and other tax and accounting service providers are experiencing burnout due to long hours and escalated client expectations.
The pressures of tax season on your business and clients
If you run a financial services business, you might be receiving more calls, emails, and texts than you can handle.
Your clients may have
complex needs and urgent questions—questions such as…
- “What’s going on with federal and state tax laws this year?”
- “How are my stimulus payments taxed?”
- “What do I need to know about capital gains?”
- “How am I supposed to report my crypto income?”
- “Is it true that we’re getting a smaller refund this time?”
- “What do you mean I need to pay self-employment taxes?”
- “Is now a good time to downsize my home?”
- “How can we reduce our spending this year?”
Or maybe you’ve been answering questions like those for the past two years. Perhaps you’ve been working long hours since 2020, and maybe you’ve decided to protect your time by raising your fees—which leads to even more difficult conversations.
At Ruby, we’re here to reduce your burden. Whether you need client communication help online or on the phone, or a few quick tips on navigating conversations, we’ve got you covered.
First, let’s dig into a few recent finance disruptions and hot topics people may be looking to you for answers about.
4 reasons your clients might be more stressed out than usual this tax season
1. They made new investments last year.
It started with GameStop, but it didn’t end there. Meme stocks are stocks that rise and fall with social activity online, and they went mainstream (and then some) in 2021.
At the beginning of the year, GameStop traded at less than $20 a share. Reddit users and retail investors influenced the market, forcing a short squeeze and causing hedge fund investors to push for a pause on the trading of GameStop stocks—not once, but twice. The stock went up and down erratically, at one point rising nearly 700% in a week.
Behind much of the volatility were new and first-time investors—possibly including some of your clients. And if they invested in meme stocks, there’s a less-than-zero chance they invested in cryptocurrency, non-fungible tokens (NFTS), or both. From the blockchain to bored apes, Dogecoin to HODL, some clients may be speaking a new language, but they’re probably not experts in terms like “capital gains” and “form 8949.”
2. They started their own businesses recently.
Did you know that Americans filed 5.4 million new business applications in 2021? That’s a million more than in 2020, which had already set the record for new startups in a year.
There’s no single thing driving more and more people to start their own businesses, but it’s not hard to see a few of the factors behind the trend:
Some people do it out of necessity. Maybe they’ve been laid off or don’t see another viable option for creating financial security for themselves and their families.
Some people are seeking better opportunities. They don’t feel like working for someone else gives them the money, flexibility, and control they want.
- Some people are taking advantage of recent sociological and technological shifts. It’s easier than ever to set up an online business—whether it’s consulting, coaching, freelancing, retail/dropshipping, delivery, or any one of a number of businesses in fast-growing industries.
The bottom line: more people than ever—and a more diverse group of people—are striking out on their own. And that means countless financial services clients with questions about self-employment taxes, separating business and personal expenses, reporting multiple sources of income, and other matters. Many people seeking advice are doing so for the first time and may lack reliable resources in their existing networks.
3. They’re confused about recent tax legislation.
The tax code changed significantly with the Tax Cuts and Jobs Act (TCJA) of 2017. Taxpayers are still catching up with annual adjustments while other elements come into effect in 2022. Complicating matters further are COVID-related relief bills that extend, amend, or adjust various credits, deadlines, brackets, and… um, ledgers?
Can you tell I’m out of my depth here?
Honestly, I find the details of taxes overwhelming during a “normal” year. I’m no financial professional, of course—but I’m guessing most of your clients aren’t, either. Many of us are looking for digestible information about what we can do this year to maximize our returns or minimize our payments.
I realize providing that is not an easy feat for even the most well-versed accountant or financial advisor, but the need for it is really real this year, and that’s because…
4. Many people are struggling with rising costs of living.
Food, gas, cars, clothes, flights, entertainment, lodging, electricity, air—everything has gotten a lot more expensive recently. The Consumer Price Index soared over the last year, and it appears poised to continue soaring this year.
It’s a disruptive, difficult time for people at many income levels, which makes the stakes during an-already stressful time of year feel even larger. Your clients may be counting on you to help them save money but not realizing you might need to charge them more—because your expenses have gone up as well.
What you can do for your clients—and yourself
Here are a few tips for helping stressed-out financial clients, while protecting your own time and well-being:
Listen and empathize. Take time to learn what someone is stressed about or going through. Simply showing up and giving them the space to talk through their worries is a powerful service in and of itself.
Point them toward informational and educational resources. Help people help themselves by sharing articles, videos, or infographics from others they can consult to better understand their current tax landscape and financial reality. (Have content of your own you can share? Even better!)
Establish the right boundaries. Existing and prospective clients may want or need to contact you outside of your business’s hours, but that doesn’t mean you have to wait by your phone or computer 24/7. A client communication service can fill in for you, collecting messages, capturing leads, and helping people access the information they need, so you can follow up when (or if) you’d like. Remember: you don’t need to be everything to everyone just to keep your business afloat.
Get help today with virtual receptionists.
If you need help managing communication with your clients and prospects, or just more productive time in your day, call Ruby.
We’re more than another answering service for finance professionals. We’re a team of trained, friendly virtual receptionists who make connections and create memorable experiences, 24/7.