While accountants are weighing up their licensing options, their clients may already be on the move, unwilling to wait for their accountant to provide them with a wider range of financial advice services.
A recent survey by Investment Trends has revealed that 26 per cent of self-managed superannuation funds (SMSFs) who stopped using an accountant in the last 12 months did so because they preferred to go to another adviser. Typically, they are moving to an adviser who can provide them with a wider range of services, including financial advice.
While SMSFs have generally attracted individuals who like the idea of control and self-directed investment, there is an increasing tendency for Trustees to require and seek out advice. The Investment Trends survey indicates that SMSF Trustees have unmet advice needs in critical areas such as estate planning, aged pension and other pension strategies, amongst others. This data demonstrates an opportunity to provide SMSFs with higher value added services through the provision of financial advice.
Furthermore, of the over 2,000 SMSFs who indicated in the Investment Trends survey that they currently use an accountant for tax advice only, 48 per cent said they would consider also using them for investment advice if it was offered.
The Investment Trends data supports the evolution of client preferences that we have been witnessing in recent years. In speaking with accounting firms, we find that many who have expanded their service offering to include financial advice have done so due to repeated requests from their clients. Their clients see the benefit of obtaining advice from their accountant with whom they have built a relationship of trust over a number of years. Their accountant already has access to their financial information and are a professional that they respect and whose opinion they value.
In considering the right licensing option for their business, it is wise for accountants to think not only about how they currently service their clients, but importantly how they will service them in the future. In doing so, considering the services that their clients will likely seek is critical to selecting an option that will ensure that the business continues to grow.
Choosing an option that is inconsistent with clients’ preferences may mean accountants not only miss out on the opportunity to fulfil their clients’ financial advice needs, but also lose them as an accounting client. There is a high likelihood that if they seek financial advice from an alternative adviser, clients will also take their accounting business elsewhere.
Accounting firms who can provide their clients with a wide range of financial services, including traditional accounting and tax advice, as well as broader financial advice services will deepen and protect existing client relationships, establishing a platform for future growth.
David Lane is the chief executive of Count Financial Limited.
