The dealer group’s chief executive, Mark Stephen, told SMSF Adviser that despite the extension of the deadline for new financial advice education and exam requirements until 2026 and 2022, respectively, there was still an “inevitability” to the decision accountants needed to make as to whether continuing to provide advice to their SMSF clients was viable.
“There is that inevitability of deciding because you need to do these education requirements under a catch-all, you need to make that decision and whether it is now or in the next year or two, the inevitability is still there,” Mr Stephen said.
“In that time, there are one of several options to consider — it’s either move to a full advice model, move to a referral or joint venture or integrated advice business, stick to SMSF advice but have that outsourced referral with an adviser who can provide full advice, or make a decision to hang up the authority and look at other options as far as providing advice.”
Mr Stephen said with an increasing regulatory and cost burden on accountants who chose to be a jack of all trades, the sector would undoubtedly see an increase in accounting and financial planning firms joining forces to facilitate easier provision of holistic services for clients.
“Where we are heading is full convergence and full[y] integrated advice, and groups like Lonsdale have spent 10-plus years developing our model around this,” he said.
“We track the ratio of revenue from financial planning to accounting in our firms. A successful integrated business has 30 to 40 per cent financial planning revenue to accounting revenue, and at this minute Lonsdale on average is tracking at about 38 per cent, so it shows what we are doing works.”
Mr Stephen said in the dealer group’s experience, a joint approach to leadership, governance and values needed to be put in place from the beginning to avoid the common cultural clash that occurred when accounting and planning firms came together.
“Some relationships don’t work because of the cultural misalignment and that has been the make or break of some of these integrated advice relationships, because unless you have the same core values, it’s never going to work,” he said.
“It stems from leadership and governance, and once you’ve got that plan in order, that is where it starts, and you build in the people and culture to go with that. Then you look at your value proposition and the wraparound to that is about the procedures and systems within the business.
“It could take 12 to 18 months to install all of that — in our experience it takes a couple of years — but once you get those things right, the rest will fall into place.”
no its not… wishful thinking as gives another 2 years on the gravy train
I was not aware that the extensions had been “blessed” and was now legislated.