Structural and Regulatory Changes Drive Tax and Accounting Professionals to Adopt New Ways of Doing Business
Market trends and increased complexity are driving the demand for cloud-based individual tax planning solutions.
From structural to regulatory changes — the professional tax and financial market is undergoing tremendous change. To address these, professionals are looking to cloud-based individual tax planning solutions to help navigate the increased complexity. Here is a quick glance at the trends impacting the way professionals run their business.
- Partnerships are more common. More than ever, wealthy families and individuals are using partnerships and limited liability companies to manage assets. This provides tax protection, as well as protection from creditors and estranged spouses to maintain family wealth. However, with IRS audits into partnerships on the rise, it is even more important for firms to understand how to advise clients on the use of partnerships and LLCs as a wealth protection strategy.
- Regulatory changes are inevitable. IRS regulations are already changing, as evidenced by the rise of audits into partnerships, as mentioned above. Industry professionals don't expect the regulatory changes to stop there. According to Financial Advisor Magazine, 20 percent of senior executives expect to see greater regulation within five years and 32 percent expect to see regulatory changes increase within the next five to ten years.
- Structural changes to professional firms. According to Bloomberg, the top 50 family offices in 2014 had over $1 trillion of assets under advisement, highlighting the emergence of the family office. The family office model is an appealing structure for both new and old members of the ultra-wealthy since it provides increased oversight of employed professionals and the money they control. Also impacting the face of firms is a change in the employee demographic. Nearly one-third of today’s workforce is comprised of millennials (employees between 18-34 years of age in 2015).
- Consolidation among top firms. An increase in mergers and acquisitions means that professionals can no longer count on employees for historical knowledge of accounts and individual investors. In addition, mergers have exponentially increased the number of clients and data that firms must manage.
What does this mean for professionals? Based on feedback from customers and partners, with these dramatic changes come the need for a new way of doing business. Not only are professionals looking for tools to help them better plan for the many regulatory changes on the rise and the larger amounts of assets under advisement, they are also looking for solutions that address internal structural changes, and, of course, meet the needs of their modern-day clients.
To that end, cloud-based individual tax planning solutions such as BNA Income Tax™ Planner from Bloomberg BNA may just be the resource professional firms need to weather the plethora of market changes today and into the future. BNA Income Tax Planner helps professionals model out complex tax scenarios (even for partnerships and LLCs) to provide sound planning in response to the influx of regulatory changes. As a cloud solution that provides anywhere, anytime access to financial plans, BNA Income Tax Planner is also a natural fit for the digital, native millennial generation. It is a new way to analyze and share data, while ensuring seamless service to clients even during a merger or acquisition.