December 2014: Online Tax Centers

Every investor loves the earnings that come with dividends and selling appreciated investments. The tax regulations governing these types of earnings, however, are complex, and can confuse even experienced investors trying to prepare their returns themselves. Brokerage firms can provide an essential service to their clients by offering a single location that can serve dual practical and educational purposes. A centralized tax center can offer access to tax documents, important filing and mailing dates, and educational resources and tools that help clients tackle their tax returns. This e-Monitor Report examines investor tax centers from brokerage firms in our coverage group, a topic we last examined in March of 2013.

We specifically look at the following criteria for each detailed finding:

  • Is there a centralized public and/or private site tax center? If so, how easy is it to access?
  • Does the firm provide tax-related educational resources? In what format?
  • Are proprietary and third-party tax planning tools and calculators provided?

Of the 14 firms with unified private site tax centers, half provide a nearly identical tax center on their public site, or access to client-only resources or tools. Some firms offer many of the same private site resources to public visitors in a centralized location; however, the format and layout differ from the private site versions. Four firms with private site tax centers do not offer a similar iteration to public site visitors. Private site tax center locations vary from firm to firm. The majority of firms place their tax centers in either a research, insights or education-equivalent tab; however, four firms link to their tax centers through an Accounts main navigation tab. No firms reviewed for this report elevate their tax centers to the main navigation level.

Additional key findings include:

  • Seven firms offer an identical tax center to prospective and current clients, with the exception of account-specific information.
  • Five firms offer less than the median seven years of tax documents online.
  • Half of the firms currently offer third-party tax software discounts.
  • Capital Gains and Tax-Equivalent Yield calculators are the most common tools offered by firms.