Advisors now have a new tool for deriving planning solutions from clients’ tax documents and offering proactive tax planning recommendations.
New York-based FP Alpha, an AI-driven technology support platform for financial advisors founded and led by Andrew Altfest of Altfest Personal Wealth Management, this week unveiled Tax Snapshot, which offers advisors actionable planning steps created from digitally reading a client’s tax documents.
The new tool uses natural language processing to comb through those documents, including tax returns and wills, and then offers insights that lead to the next logical planning steps. Reports contain details on 17 disciplines, including state-specific information, covering Roth conversions, charitable deductions, tax credits and QBI analysis with no human intervention needed.
“This is an instant snapshot, dynamic, deliverable and relevant for the most simplistic all the way to the most advanced client,” said Josh Grossberg, FP Alpha’s director of business development. “FP Alpha’s core value is to upload essential client documents and tell you what recommendations are relevant for that client, and this summary fits extremely easily into that workflow.”
While there are other tools on the market that offer advisors similar capabilities, like Holistiplan, Tax Snapshot also offers customized reporting and the ability to create scenario plans for potential changes to tax laws and regulations, including the recent tax proposal from the Biden administration. Advisors can also change assumptions around Social Security and Medicare premiums.
Altfest built FP Alpha from tools created at his RIA that have been used since 2018 to automate document management and more easily translate data from forms like tax returns into planning opportunities.
“Financial wellness is the direction the industry is moving in, but we need the technology to support it,” said Altfest. “For years, we were disappointed that we didn’t have the basic planning tools to execute on that vision, but with these tools the value of holistic financial planning can be scaled across an advisor’s entire client base.”
Altfest added that the system was designed to protect a client’s personally identifiable information. After the relevant tax forms are read, the forms are deleted from FP Alpha’s server, leaving behind only the recommendations and the relecant raw data.