We talked with Catherine Tindall about:
- Why planning, forecasting, and analysis are essential components in building an effective tax strategy
- Key tax considerations for advisors and firms as year-end approaches to help optimize income taxes and future growth
- Why working with a tax professional who understands the advisory space — and knowing the right questions to ask — can help enhance an advisor's CPA relationship, experience, and outcomes
About Catherine Tindall:
Catherine Tindall, CPA, is the founder and head tax strategist at Dominion Enterprise Services and host of the podcast “Financial Advisors Want to Know.” Specializing in helping RIAs, independent broker-dealers, and other 1099 financial advisors, Catherine goes beyond routine income tax return filing to offer proactive planning that supports growth and expansion. Observing a gap in strategic tax analysis and planning, Catherine takes a client-focused, holistic, and proactive approach to tax strategies — the opposite of legacy CPA firms — to help advisors and firms grow more efficiently and achieve their current and long-term goals.
Featured Resources
- Catherine Tindall, CPA on LinkedIn
- Financial Advisors Want to Know Podcast
- Dominion Enterprise Services
- Financial Advisors Success Podcast with Michael Kitces
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Full Audio Transcript:
00:00:00 - 00:25:18
Lauren Hong
All right. You guys are in for a treat. We have Catherine Tindall joining us today. She is a CPA, specifically working with advisors, and I'm excited for her to share a little bit more about her story. I should say, not just advisors, independent registered advisors, independent broker-dealers, and other 1099 financial advisors. What is your background?
00:25:18 - 00:29:09
Lauren Hong
How did you pick this space? We'll just dive in.
00:29:12 - 00:59:13
Catherine Tindall
Yeah. Thanks for having me on, Lauren. So it's funny because I'm a second-generation CPA. My parents had a tax practice growing up. And I always knew I wanted to go into tax once I was in college and had gone through different things. In my firms, specifically when I worked for other CPA firms, I was pretty dissatisfied with the model of service delivery a lot of the time, because they were more interested in getting forms executed than actually looking at what is the client experience in relationships.
00:59:13 - 01:28:19
Catherine Tindall
And so when I started my firm, five years ago now, a big part of that was wanting to switch the service delivery model. So our firm has always been really focused on planning first and advisory work first, and tax compliance work second. And then over the course of our firm's experience, I realized my favorite clients I was working with were financial advisors because they were growing quickly.
01:28:19 - 02:06:17
Catherine Tindall
They understood it. They like strategy. They want to understand, and for them, the income tax piece is really significant. It's a really big cash flow hit. It's hard to manage. There's not a lot of ways to shield it and they want to be proactive about it. So we decided to niche into just working for advisors because I realized there wasn't really anybody leading in the space for serving them in this capacity of doing the tax strategy work for their firms as they're growing, and they have really niche and weird issues. Some of them have statutory W-2s, and a lot of them are subject to FINRA rules that regulate how they’re able to recognize income
02:06:17 - 02:23:05
Catherine Tindall
and where they can record it, and entities they're trying to buy other people's books of business. And there's different ways you can structure that. And there's just a lot of dynamic activity going on, especially to that. They grow really fast so the income tax piece becomes really challenging really quickly.
02:23:08 - 02:43:09
Lauren Hong
Super interesting. And then I also can appreciate too, that you have that focus on customer experience and so many firms also. That's really important to them. And that high-touch relationship, so you made that a part of your business versus just the transactional component just feels like there's a good fit there.
02:43:09 - 03:05:18
Lauren Hong
Okay. So tell us a little bit more like what else is unique and working with these firms? I know you mentioned some other pieces. Are there any unique periods firms should be aware of when they're thinking about that growth phase — they might be a 1099 or just getting started to really expanding and growing their firm? What are some of those key milestones advisors should be thinking about?
03:05:20 - 03:25:19
Catherine Tindall
Yeah, I think the big one I always take away when I have these conversations with advisors is a lot of the time I ask them, okay, what does five years from now look like for you? And it's so funny, they are so good at doing this for their clients. But I think for themselves it can be really challenging because I ask them are you just trying to build up a lifestyle practice?
03:25:19 - 03:43:07
Catherine Tindall
Are you trying to build something big? And it really depends on what that initial goal is to then what the trajectory of the firm is going to look like. And then also when we're going to do tax strategy work, what that looks like, because I'll give a very different recommendation to somebody who tells me I read 10X is better than 2X.
03:43:14 - 04:04:03
Catherine Tindall
And we're going to go to a billion under management. Well, we're going to have a very different strategy of how we're going to get there versus — I had a client prospect come in a couple weeks ago who we're working with going through an assessment, and he wants a lifestyle practice. He's going to eventually get up to a top-line revenue of about a million, million a half, something like that.
04:04:03 - 04:22:00
Catherine Tindall
And that's where he wants to end up. And he doesn't want to hire a bunch of people. So we're taking a very different approach. So I think for a lot of advisors, there's an initial point where they're kind of in the same pack together, where they're in that building stage, and then some of them will just stay on the lifestyle firm side, and then others will be I want to grow.
04:22:00 - 04:41:02
Catherine Tindall
I want to build an empire under me. For that first threshold they're together in the same pack. The biggest initial question is usually entity structure, because a lot of them will be going from maybe they were somewhere else where they were a W-2 advisor, and then now they're okay, I can bring my book with me.
04:41:02 - 04:57:07
Catherine Tindall
Hopefully you can bring some of your book with you. And then it turns into, okay, when do I get to the point where doing something like an S Corporation makes sense? Or if I'm really going to have an aggressive M&A strategy, do I need to have a more complex entity structure? Am I going to have junior advisors under me?
04:57:07 - 05:05:04
Catherine Tindall
Am I going to have partners? How am I actually going to go through the growth phase and then getting your entity structure to reflect that so you can grow into it?
05:05:05 - 05:22:05
Lauren Hong
Super interesting. That makes sense logically just for how businesses grow. But I think for the advisory community, if it's an LLC or like you said an S Corp or however the cards fall, it would probably be much different strategically depending on the goals. So that makes a lot of sense.
05:22:05 - 05:41:07
Lauren Hong
So tell me a little bit more — shedding the light on so many different firms. And I assume that's one of the reasons people are coming to you. You've kind of seen the behind the scenes. How much are you using that to sort of guide decision-making or is it just super unique for each firm and where they're at?
05:41:09 - 06:02:07
Catherine Tindall
Oh, it's really dependent on their particular situation. But it's also industry things. It's really funny the things I learn in certain cases, because we're so specific in the niche we work with, we get to use the same material in all the client relationships. And so I was having a conversation with somebody earlier and they were struggling with something.
06:02:07 - 06:18:04
Catherine Tindall
And I said, oh, well, this other client we had used this vendor for this and had a really good experience — do you want an introduction? And it's a lot of that kind of a thing. Or we had a client who had the same issue with Northwestern Mutual and the way they were recording income or whatever.
06:18:10 - 06:32:21
Catherine Tindall
And this is how we were able to structure the entity to make it work for them and also be compliant with the IRS rules. And so just being able to have those experiences of, well, this is what we did in a previous situation and this is how we were able to make it work.
06:32:26 - 06:56:05
Catherine Tindall
It's kind of similar to yours. We're able to go more quickly through those decisions. But I think with a lot of strategy work, it's so integrated with people's personal lives too. Like in the assessment process. For us, it's really a lot of conversation around really personal things because it all ties into what's going on.
06:56:07 - 07:14:06
Catherine Tindall
Just the way your tax code is structured, it's really personal. I always joked earlier on in my career, if you were a really creepy person, becoming a tax professional's actually a way to get the most information about people than probably anybody else. Maybe financial advisors get more information.
07:14:08 - 07:14:18
Lauren Hong
A little bit.
07:14:18 - 07:36:18
Catherine Tindall
But we know about the medical bills, we know about the kid's tuition. We know where the kids are going to college. We kind of know everything about people. And it's because your income tax touches every part of your life. So it does end up being really unique. But in a lot of ways, especially with the different institutions people are working with — we've gotten used to now, okay, you're with LPL, this is how we're going to be seeing things.
07:36:21 - 07:41:23
Catherine Tindall
You just get used to some of those nuances and then how to navigate it to make it more tax- efficient.
07:41:23 - 07:58:27
Lauren Hong
Super interesting. We feel a similar thing; we've worked with LPL firms before and we're familiar with their compliance processes, so on and so forth. Or you're alluding to that kind of quarterback who can help make those referrals because you've got those interconnections or you've seen other similar examples.
07:58:27 - 08:19:12
Lauren Hong
So you can help shed the light before someone gets there, to help with that proactive decision- making. So I hear you, I think it's one of the unique things that makes it really valuable. And working with an outsourced partner that really knows your space. So you mentioned earlier you just really enjoyed working with this demographic.
08:19:15 - 08:34:20
Lauren Hong
Because you ended up working with this demographic, did you just sort of learn along the way and deepen your roots in this industry? How have you learned about all the ins and outs? Because I do feel like this world is very — I mean, you can't just jump into it, right?
08:34:20 - 08:43:20
Lauren Hong
There's plenty of jargon. And in connection, tell me a little bit about your journey in finding this hub and really kind of learning the ins and outs.
08:43:22 - 09:10:25
Catherine Tindall
Yeah. I guess for me, I've had advisor clients for a lot of my career. So I’m just used to working with them in that capacity. And then really just diving in, listening to podcasts and just engaging with things, finding thought leaders and listening to them and watching the different kerfuffle that goes on, like the CFP Board advertisement thing that's going on right now.
09:10:28 - 09:29:27
Catherine Tindall
And it's just one of those things where once you find a niche of people you like, you just kind of get into it. And if you're curious and genuinely, I think for me it comes from a place of the better educated I can be holistically, the better my niche advice, my specific slice of things on the tax side is going to be better advice.
09:30:02 - 09:53:19
Catherine Tindall
Because what I deal with is kind of the remnant of everything else that's going on in their situation. Like the tax at the end of the year is a reflection of their activity, of what's going on. And so if I don't have a more holistic approach when I'm just talking about this tail of the dog, like in order for me to do a good job on the tail of the dog, I kind of have to understand the whole dog, right?
09:53:19 - 10:14:21
Catherine Tindall
So that's been my approach with it and the curiosity and running my own podcast and those kinds of things come from that place of me knowing as much as I can about my clients and what they care about and what's important to them besides just the piece I touched, which is the tax advisory, it's just going to make that so much better.
10:14:24 - 10:33:00
Catherine Tindall
It's so much more robust and having those deeper relationships with them, being in the cockpit with them, trying to advise them. And I see so many tax professionals where they're not genuinely interested in their clients and they're really great at tax but they're not genuinely interested in the client and more of a transaction.
10:33:02 - 10:51:11
Catherine Tindall
And so it ends up you give bad advice. And so I see different maneuvers that happen. For instance, people being told, hey, you got a big tax bill, why don't you get an SUV? Because then you can get a big write-off. Well, I don't like that advice.
10:51:11 - 11:11:12
Catherine Tindall
Why don't you invest into a coaching program? Because that's going to produce an ROI. And I know if you can work with this coach, this coach or this coach, this is about what you could expect on an ROI. You'll get a deduction this year but then you'll defer the taxes into the growth in the future years you'll get from doing this versus an SUV, which is just all depreciation.
11:11:14 - 11:23:02
Catherine Tindall
So it's stuff like that where I think once you really get to know, okay, what's the end game you're really trying to drive toward. It just makes the advice so much better. And I'm sure you've seen the same thing on the marketing side.
11:23:02 - 11:24:12
Lauren Hong
Like literally, I mean.
11:24:12 - 11:25:06
Catherine Tindall
Big difference.
11:25:09 - 11:40:22
Lauren Hong
We see sometimes firms will come to us and they're really hungry for organic and they want it now and they're getting pitches like that or just drinking from a firehose of you pay X number of dollars and ad dollars and this and that, and all of a sudden you're going to have this flood of clients. It just doesn't happen like that.
11:40:22 - 12:05
Lauren Hong
You're still dealing with humans, lifecycles, trust building. So it's a balance, right? I mean, maybe you could have something like that if you've got a huge base built, and you've got a full funnel, pieces in place but there are absolutely cautionary points on all of it.
12:07 - 12:20:08
Lauren Hong
Okay. We've got a little bit of time left. So as we look ahead, we're toward the end of the year going into the next year, what should firms be thinking about from the tax side or what are you trying to make sure is on top of folks’ minds as they go into the end of year and beginning of next year?
12:20:10 - 12:36:02
Catherine Tindall
So I'd say a big one is — and it will be completed by the time this comes out — for advisors who are listening to this and are interested, I have a guide that goes through all the major questions I get from advisors, like should I be an S Corp? Just all the things I'm constantly hearing from people.
12:36:02 - 12:51:19
Catherine Tindall
I'm putting it into a guide people can get. So if you're interested in that, just send me a DM on LinkedIn and I will send it. I'm not going to put it online on our website or whatever, just send me a DM and I'll send it to you. It's going to be partially like what we use internally in the firm too.
12:51:22 - 13:22:05
Catherine Tindall
And my user on there is just Catherine Tindall, CPA. You can find me and ping me for that. That's going to be a much more comprehensive answer than what I can give you right now. But so basically, looking into next year, everybody's talking about election stuff and my crystal ball is imperfect. I think a lot of the things people are worried about, we just won't be able to tell until we get farther in in terms of things that are going to be sunsetting from the TCG act like, is the QBI deduction going to go away, all of those kinds of issues?
13:22:05 - 13:40:26
Catherine Tindall
It's just too hard to tell. Like the fact we don't have a strong sense of who's even going to be in the Oval Office. It's just going to be hard on the tax policy side. What I have been seeing is a number of tax proposals that get pushed out there and sound bites that sound good.
13:41:04 - 14:04:04
Catherine Tindall
Are they actually going to turn into tax policy, yes or no? So the things people I think actually should be paying attention to are the parts they can control. A common issue I see with advisory firms is that a lot of them really want to have tax planning work done and they just do not have a CPA partner who has a deep understanding of what their requests are..
14:04:04 - 14:32:14
Catherine Tindall
I had an advisor this week who had asked his CPA for two years in a row, should I be an S Corporation, and the CPA was like, no, I don't think so. And that was the level of planning that went into that versus when we actually dug into his situation, he had wasted over $100,000 over the course of a couple of years, which was meaningful money for him and his practice size.
14:36:09 - 14:37:21
Lauren Hong
Regardless of practice size.
14:37:23 - 14:55:27
Catherine Tindall
Especially when it's just waste. It's tax waste. Absolutely. He was like, well I asked the CPA; is this malpractice? And I asked if he actually did a real engagement for you or did he just think it was a casual conversation, not realizing that actually we should do some analysis here.
14:55:27 - 15:24:14
Catherine Tindall
Like let me run some projections, let me run some numbers. Let's do a reasonable comp study and see, because that's one of the core issues with corporations is you have the owners have to pay themselves a reasonable compensation. Let's do some math. Like let's see what it would actually be. And so I think for a lot of advisors, that's something you can control — if you haven't had tax planning work done that's a formal engagement, you should be signing up for it. I think a lot of time they will ask for that from tax professionals.
15:24:17 - 15:44:19
Catherine Tindall
And the tax professionals just don't see what they do a lot of the time. And our firm is different. We're completely structured that way. But if you're happy with your existing tax professional and need to advance that forward, sometimes it's having that conversation of, hey, I need more.
15:44:23 - 16:02:17
Catherine Tindall
They just think they're being hired to get the forms filed on time, rather than looking in the future, into what you've got going on. The number of times I've had advisors come back to me and they're like, yeah, they gave me estimated payments that were 20% of what they should have been because we grew double this year.
16:02:19 - 16:20:28
Catherine Tindall
And I called them and said they never did anything. So it's like those are things you can control. If you're not having a responsive relationship, make sure you've set that relationship up correctly for your growth and for what you've got going on so you're not walking into a surprise at the end of the year.
16:21:00 - 16:37:24
Catherine Tindall
Because I always tell everybody, the carriage turns into a pumpkin at midnight, December 31. That tax bill is set. There's a couple of maneuvers you could do with retirement planning but for the most part that tax bill is basically set. And so it's not a mystery.
16:37:24 - 16:47:09
Catherine Tindall
You should know what that is. And it's not something where even during the year forecasting into, we can do math, we can do forecasting and things like that.
16:48:01 - 17:10:07
Catherine Tindall
And so I think for a lot of advisors, my piece of advice going into the end of years is pay to have some projection work done, figure out if you've had significant change, figure out what that's going to be so you can cash flow forecast for that. And so if you're getting big quarterly brokerage checks, you know how much to push aside, there's a plan there; you have a plan on how you're making your estimated payments.
17:10:09 - 17:21:24
Catherine Tindall
And if you're going to be making a change going into tax season or a change into a relationship, now's a good time to do that. Because then if there's other issues, you have the time to correct them before the end of the year.
17:21:25 - 17:40:14
Lauren Hong
Such good advice — that forward thinking, not just looking at the kind of the business plan, right? Which I think a lot of times folks are doing end of year, thinking strategically about the new year. But it's the other parts of the business that, well, this just taps directly into the business plan. But it's a component that's worthwhile to take that time and energy to look ahead on.
17:40:14 - 17:55:03
Lauren Hong
Well, this is wonderful. Thank you so much for sharing so many good case studies and just examples of how you have been able to help advisors and firms with projections and just supporting them with where they're at. So we can find you at Dominion dot CPA. Did I get that right?
17:55:03 - 18:12:01
Catherine Tindall
Yeah, that's the website. Best way to get me though is LinkedIn. I'm really active on there. So for people who are interested in the work we're doing, send me a message. I'm always interested in learning what's going on in your world and being able to provide resources that'll help people get where they need to go in terms of questions they have.
18:12:01 - 18:17:18
Catherine Tindall
Hey, I heard this; I get a lot of those kinds of emails. Hey, I heard this.
18:17:21 - 18:32:22
Lauren Hong
Hey, you know, we do that too. I watched this video. Somebody told me I should be doing this. I'm like, okay, let's take a pause. Do we really need to do that shiny object? Unpack it, like you said. That's awesome, Catherine. Thank you so much. Always good to chat with you. I appreciate your time.
18:32:29 - 18:35:09
Catherine Tindall
Yeah. Likewise. Lauren, thanks so much for having me on.
18:35:11 - 18:41:02
Lauren Hong
Of course.
