Up to 69 per cent of most accounting practices revenue is derived from compliance based tax and accounting work. Is your core business under threat of being commoditised?
Accounting firms like many other businesses globally, are feeling the pinch of squeezed margins due to greater competition coming from all angles. There are a number of large players in the market moving into spaces where accountants have traditionally operated in, especially in admin and compliance. Technology is getting smarter and faster, eroding margins, enabling more self-directed services and impacting the ability for professional advice businesses to charge fully for the value they create for clients through an ongoing advice relationship. How do you compete with operators who are offering “SMSF audits starting from $270”? It’s the classic battle between those who offer $10 haircuts and those who fix $10 haircuts. We are constantly asked to do more with less and our clients are demanding more of us too.
So how do we move on from here? We embrace the opportunity.
The opportunity is to make a decision about the type of business you want run. To provide, or partner with someone who can provide professional advice on SMSFs which creates value for your clients because it meets their needs, enhances their lives and strengthens your professional relationship.
Successful businesses enable strategies where the immediate benefits aren’t always clear. It’s a long term/short term trade off and yes, there’s a cost involved. No one ever started their own business without initial investment and hard work, and now it’s time to evolve. Returns are rarely immediate and you need a good partner who you can trust and will support you along the way. But you must first make the choice to take the opportunity.
As I stated in my previous article, you can either stop giving SMSF advice to clients; refer SMSF advice; get licensed under an AFSL, or take out your own AFSL. There are costs and benefits associated with each and you can find the details summarised here.
While running an AFSL can be expensive, you can manage costs by partnering with the right business and leveraging the scale benefits that come with this partnership. This will also allow you to do what you do best – provide quality advice to your clients. We have helped many businesses make this choice and we have seen how it has enhanced the value of the business and its service proposition.
With inevitable change, how will you ensure the longevity of your business and your relationship with clients?
Matt Englund is the Managing Director of Securitor. His vision and passion for Advice is evident in the clear strategy he has developed for supporting professional advice businesses and enabling operational excellence which results in a commercially sustainable business outcome. Matt was also a judge in No More Practice Series 3, Series 4, & Series 5.
