Accountants are in the spotlight with the recent raft of SMSF reform. But with much of the attention being placed on the removal of the accountant’s exemption and the need to get licensed, the opportunity is often overlooked.
SMSF licensing is not about getting licensed, it’s about taking control of how your business model will evolve in the future. The true value lies in the ability to maximise the potential of your advice proposition to enable business growth. Let’s explore this further.
Building an integrated advice solution
The SMSF segment is now the largest segment of the superannuation market, and 90 per cent of self-managed super funds have a relationship with an accountant. Trustees expressly prefer a professional relationship that covers all their needs. This doesn’t necessarily mean that accountants need to be everything to everyone, nor does it make good business sense for them to do so.
Under the new licensing regime, accountants will need to undertake the full financial planning process when providing SMSF advice. This includes fact finding and producing Statements of Advice. Building this process into your cost to serve presents a significant challenge, which includes articulating the additional cost to your client. As far as the client is concerned if you were licensed yesterday you are licensed today and whether the law changed in between is your problem, not theirs.
There are however some options that will allow you to continue to service your client’s wealth needs while still maintaining an efficient business model:
The partnering approach
Building an integrated advice offering can be done by establishing a strong referral partner, or bringing a financial adviser in-house. The right option will depend on your long-term advice proposition and strategy. Whether you choose a referral partner or an in-house model, the key is choosing to partner with someone you can trust and that integrates well into your business model. That is, they are committed to taking action and establishing and maintaining an operating rhythm. This means both parties investing time in each other’s business to understand the needs of the clients, opportunities for professional advice and cross-referral.
Partnering with an adviser can have the additional benefit of enhancing the overall value of the business. I will explore this opportunity further in my next article. However, considering that accounting firms sell at about 0.9-1.0x revenue and financial advice businesses sell for about 2.5 -3.0x; then integrating accounting and financial advice services makes sense. When executed well, this results in a greater business valuation and ultimately a succession planning outcome for the business owner.
If you think SMSF licensing is just about getting licensed you have missed the opportunity. The new regime provides ways for accountants to work more closely with advisers, as well as potentially growing the value of their business.
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.
