WWYD: Using a Family Connection

In this installment of “WWYD,” a family connection results in a free service:

A few years ago, my in-laws gave us an in with their (high net worth) asset management firm as an engagement present. Essentially, the firm is working with us to manage a small (by their standards) sum of money we have managed to save. “In recognition of our family’s history with the firm,” they are waiving the minimum account values and a few additional fees. They’re a pleasure to work with and have assisted us with some one-off questions/concerns we’ve had.

Our taxes are insane this year because of multiple moves through different states. I asked them how much they charge for tax prep services—they told me it would be about $750, plus any taxes we will owe. That’s too much money for us, since we are anticipating about $1,000 in owed taxes. (THANK YOU NYC PERSONAL TAX.) I wrote back a nice note saying, “Thanks but I think we’ll try it out ourselves—would you mind looking them over once we’ve given it our best shot?” And I spent the weekend preparing our tax returns. (Three times, because we have to file separately in two states. UGH.)

They wrote back saying that they really couldn’t look them over without preparing them on their own but “in recognition of our family’s history,” they’d do it for free. And they added that this was a one-time thing and we shouldn’t get used to it. Now I feel terrible, like I’m exploiting these nice people. Do I take them up on this offer? Do I send them a tip? A nice thank you note? WWYD? — E.

Is it just me, or am I not seeing a problem here? I’m sure a high net worth asset management firm would know whether or not they are being taken advantage of—it seems like they just want to do something nice for you because they appreciate the business your family has given them. It’s also a strategic move: If you do have lots of money that needs managing one day down the line, perhaps you will remember the nice high net worth asset management firm that once did your taxes for you for free.

Do not feel bad about this. I would not feel bad about this. I would take them up on the offer. I probably would not send them a tip (is tipping an asset management firm even a thing?), but I would send them a nice thank you note.

An even better thank you? Recommending the firm to people you know if they ever need the kind of services the firm provides, and paying to use their tax prep services in the future if they do a good job. You’ll be earning more money (hopefully) as you get further into your career, and your taxes may get more complicated as you go through life changes. Consider this a free trial run.


Email me your WWYD experiences to me with “WWYD” in the subject line. See previous installments Photo: Michael 1952.



8 Comments / Post A Comment

OllyOlly (#669)

Do not worry about exploiting an asset manager for high net worth individuals. They aren’t a friend who is offering something to be polite, they are gauging their business relationship with your in-laws and offering a benefit that they feel will be beneficial to their company in the long run.

Hope you say yes and enjoy a much easier return!

Chel (#2,960)

As an employee of a high net worth asset management firm, when they say its in recognition of your family’s history, they aren’t just doing you a favor or hoping you’ll have more money down the line, although that is part of it. They are also weighing the risk of losing your in-laws as clients if you make a mistake on your taxes and mention you couldn’t afford for the firm to do them or look them over.

A close relative of mine works for an accounting firm dealing mostly with “high-net worth individuals” (the industry’s weird, cop-like euphemism for “rich people”) and a lot of them will just pay the firm to do tax returns and other stuff for their various kids and relatives. So they may also be hoping your in-laws will start doing that?

EvanDeSimone (#2,101)

Anytime a company offers you a free service they have calculated its value and your value and determined that it’s worthwhile. @ollyolly is correct. They’re not a friend who feels an emotional obligation to you. They’re making a rational choice about your business and, probably more importantly, that of your in-laws.

Tuna Surprise (#118)

I’m going to offer a really shitty (and unpopular) opinion on this issue: You were kinda a tool for asking them to ‘look over your taxes’.

I work as a lawyer and we have some clients (like you) who think that it is somehow easier to take a look at something they drafted rather than draft it ourselves. But usually the opposite is true. If you send me all the raw material, I can make the judgment calls on what is needed/what is missing, etc. But when you send me a ‘complete’ product and want me to sign off, I have to guess whether the raw material was entered correctly. It’s usually a bigger pain in the ass than doing it myself.

The value in their service isn’t whether you added all the lines correctly, it is whether you made the right judgment calls. That’s what the $750 was for. If you don’t want to pay, buy Turbo Tax for $49.99, it will help you do most complex returns.

@Tuna Surprise I think what the other commenters said still applies, but you are probably right that by trying to save them some effort, they actually made it harder on the firm(‘s employees).

ETA: That said, I’m sure a firm like that budgets a significant chunk of gratis hours for just such occasions. They may even “bill” them to your in-law’s account internally so they can see just how much courtesy time they’ve spent on them (I’m not actually sure this is a thing, but it’s what I’d do if I ran an accounting firm!)

I have two answers to this. First of all, it’s perfectly fine to let them up on their offer to do your taxes. I’m guessing the tax professionals are paid a salary that isn’t commission-based, unlike the wealth management professionals whose services you have already used for free. As others have pointed out, this offer was clearly a calculated decision on the part of the firm, and if you’re happy with them, you should return the favor with referrals and any future [paid] business you might have for them.

But I have to add that I agree with Tuna Surprise: you shouldn’t have asked them to look over your taxes. I don’t know anything about the ethics code for CPAs, but I imagine liability alone would preclude them from “signing off” on taxes they didn’t prepare. So you put them in a situation where they had to choose between disappointing a client and giving away their service. It’s good that this wasn’t a friend, but it isn’t fair to put someone in that position.

On second thought, I don’t even want to get into taxes here.

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