All signs point towards the convergence of the accounting and financial planning professions. These include regulatory reform, the removal of the accountant’s exemption, large volumes of growth in the SMSF market and the strong case for building more sustainable business models. The central imperative, to deliver good results for clients, remains as strong as ever. So what’s stopping both professions from truly collaborating and maximising the opportunities for cross referral?
Perhaps what has held back more universal convergence is traditional arguments around who “owns the client” in such a collaborative service offering. The answer is no one. If the client is at the centre of the advice process and reforms are ultimately about ensuring the client’s best interests are paramount, then who owns the client is irrelevant in relation to working together towards the client’s best interest.
In this context, conversations about client ownership fall away as accountants and advisers simply continue to provide their services with the same desire to deliver good results for their client that they have always had.
In our experience working with large accounting practices, the common sentiment is that there is a need for greater collaboration with their financial planning partner, which, when executed effectively leads to higher penetration of wealth advice in their existing accounting books. However, cross referrals are not generally done well throughout the industry. Many accounting practices we meet and work with are operating with around 5-15% wealth penetration, where ideally, they would like to see it at 25%.
If industry research is correct, 85% of all accountants have SMSF clients with investment related queries. This reinforces and strengthens the argument for a collaborative approach to wealth advice.
However, in order for this relationship to work, it requires commitment from both parties. You need a referral partner that you can trust and integrates well into your business model. That is, they are committed to taking action and establishing and maintaining an operating rhythm where both parties invest time in each other’s business to understand the needs of the clients and where the opportunities exist for professional advice and cross referral.
In my next article I will discuss the importance of creating and maintaining robust accounting-financial planning partnerships and the impact on your business valuation.
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.
