Addressing a media lunch in Sydney on Wednesday, Stanford Brown director of private wealth Vincent O’Neill said the margin pressure created by the loss of the accountants’ exemption and transition to the limited licensing regime for accountants had played a key role in the recent increase in convergence of financial planning and accounting firms.
“Accountants are more restricted from what they used to do in terms of advice regulations, so that is forcing them to consider the financial planning perspective,” Mr O’Neill said.
“The advice they once gave regarding super contributions and SMSFs now has to be done under a financial services licence, so they are being pushed to either partner with a financial planning firm or get a licence themselves.”
Stanford Brown chief executive Jonathan Hoyle said the convergence trend tended to be in financial planning firms’ favour, as they searched for more acquisitive growth due to flatter customer acquisition following the royal commission.
“A trend we are seeing is planning firms buying accounting businesses, not the other way around,” Mr Hoyle said.
“A lot of planning firms look at accounting books and think there’s some potential clients for us — no question that has been a factor because organic growth for financial planning firms has been declining to negligible rates.
“The royal commission has scared a lot of people off who need advice and would like to take advice, but now don’t trust any of the industry.”
He added that the trend was also increasingly driven by time-poor, high-net-worth clients wanting a single service provider for all of their financial needs.
“Working clients are very time-poor, so they come to us and say, ‘You’ve got all my financial data, can you file my tax return as well?” Mr Hoyle said.
“It’s [also] driven by data security — clients increasingly don’t want to give their sensitive financial data to two firms because it doubles the risk of being hacked.”
John, just letting you know ASIC have issues with templated advice so that may be why the accounting bodies don’t give them to you. You may may have missed that in your 80 hours of training whilst focusing on which font to use in your spreadsheets. It really get me going when accountants think they are smarter than they really are — I am really looking forward to ASIC finally doing something about accountants who breach the law.
Me O’Neill, “The advice they once gave regarding super contributions and SMSFs now has to be done under a financial services licence”.
Yet another clown that didn’t understand how limited the old exemption was and how much illegal zero AFSL compliance Accountants SMSF advice was previously provided and is still in lots of cases being provided ??
You have got this all upside down. Your position suggests illegal advice is always poor quality advice. I would argue that more than a small percentage of technically legal “financial advice” is useless information and not worth the client’s time or money. It is not about the AFSL! It is about the fact that you can provide good financial advice without one. It is also about the confusion out there that you actually need an AFSL to setup, close and SMSF, start/stop pensions and or recommend super. You don’t; accountants just need to read up on and and figure out why. You are the one not understanding the issue. You should be more circumspect about calling others clowns.
Been engaged with this issue one way or another since December 2015. All this talk about the loss of the accountant’s exemption being the death knell of many a small accounting firm, when it comes to so called financial advice, is simply not born out by the facts. If you are an accountant; do not have an AFSL and think you need one and/or must partner with a financial planner to stay in the game, you are an accountant who is seriously misinformed. We all like to think we know it all, which is why, in my opinion, so many accountants are clueless when it comes to this topic. If you are an accountant read up on digital SOA’s, Fintech solutions, execution only services, the State and Federal ETA and then have a good look at the ASIC regulatory guides, in particular 36, 244, 221 and 101. Cannot blame the financial planners moving in on accountants. If your typical accountant is not prepared to have a think and work out some solutions, he/she should be selling out and letting others take over.
Its the training which is killing accountants – 80 hours a year with the financial planning training being a complete waste of time. Accountants should be fighting back providing Fin Planing advice and refering their clients to share brokers who know investments and specialist insurance agents. Accountants do not need to merge. Cut the fin planning training as we do the same job as fin planners but our knowledge is far more extensive and detailed. We should be driving this process for clients not being 2nd fiddle to fin planners. THe acc bodies need to have templates there for accountants to provide their clients with a fact find etc – much like what the law society provides and the sale of busienss forms. This extends out to age care, estate planning, personal risk etc. Thats what we are meant to be doing. We are in a prime position to do this especially with cloud sowtware which is the key to this .
Good luck jack of all trades.
If only financial Advisers could dream to be as smart as you and do 2 professional jobs successfully.
Or maybe by the sound of your ignorance you don’t even do accounting very well let alone being a part time guru financial adviser
What a sad, sad situation that the accounting bodies sold out its members to the financial advisers.
I fully agree that the future is to provide clients with an integrated accouting and financial planning service. However, there are more ways to skin a cat than being acquired by a financial planning business. Such an acquisition can have it’s challenges as the financial planning and accounting cultures can be quite different. An alternative can be to create a branded financial planning service where the service provision and management is provided in a co-operative joint venture arrangement (such as those offered by Crescere Partners). Under these arrangements accountants can provide an integrated offering without imposing on their time and resources.