Wake-Up call for your clients

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Eva Rosenberg, MBA, EA - Can you believe the hysteria over IndyMac accounts? Shades of 1929!

Of course people are upset about losing their deposits. They operate on faith that the very expensive watchdogs our government pays millions to employ will protect our fundamental infrastructure - banking, communications, distribution, transportation, etc.

When banks start going under, it feels as if the country itself is failing. (Think decline and fall of the Roman Empire.)

But hey, let's not sit here being gloomy. Let's look at what you can do for your clients.

It's time to go through your client files to see who has liquid assets sitting in banks. Especially, look at the files of your elderly clients who may not be monitoring their investments carefully.

Perhaps your tax software will let you sort for clients with interest income of $500 or more? (Some banks are paying about half a percent on some accounts.)

Take a good look at the money they have in each financial institution. If any of your clients are approaching FDIC limits - find out if the bank has a CDARS arrangement.

(Read http://snurl.com/2zhm2-tax" target="_blank">MarketWatch article for FDIC limits and data on CDARS.)

If your client's deposit exceed the FDIC limits, either re-arrange their accounts so they are still covered (get family members to co-sign as joint account-holders...or) - or move part of the money to other financial institutions.

Review your own assets, in case you have funds in CDs and banks. Do it now - not later.

For your business clients who must maintain a certain level of liquidity, make sure they are in a bank with a CDARS membership. Have your clients maintain 2 months' operating capital in their most liquid acocunt. And move the rest to CDs or accounts that qualify to be shared amoung CDARS member banks.

Or - if you have better ideas, DO feel free to pass them along to us!


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By Valerie Pickens
Jun 26th 2015 01:12

Any ideas on how to drop clients that don't match the profile of the type of client you want to serve. Like the 1040A client who calls at least twenty times before filing what is virtually a short form? I don't want to come off as a snob but I really want to decide who I best serve especially when time is at a premium. I calculated that if I talk to each client for 15 minutes during tax season I lose ___hours of real time. So this particular client is costing more than the fee I can reasonably charge him.

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