Speaking to SMSF Adviser, Planet Consulting founder and principal consultant Rob Pillans said he has heard a number of reports from accountants who’ve taken over other accounting firms, where the clients have not received the best possible advice under the previous owners.
“It’s a particularly difficult situation and something that I’m actually talking to Chartered Accountants Australia and New Zealand about as well, because there are obligations for people taking over the client, and a process you need to go through,” said Mr Pillans.
“It’s a really tough one. In most cases all you can do is work with the client to try and get them back on track with better advice.”
This can be a very awkward situation, he said, as the new owners of the firm will have to explain to the client that the advice they received previously wasn’t the best advice.
It is very important that the buyers look at the work papers or some of the tax returns lodged by the firm to ensure it’s been done correctly.
“So digging in and looking at some of the work that’s been done, and how it’s been documented and so on,” he said.
I don’t believe the legislation stated “Best Advice” rather it states “Best Interests of the clients” Same comments can be applied in reverse for sellers who encounter un-ethical advisers who buy a business. Then to pay for the large loans set about churning every product, insurance and investment strategy they can into their licensee approved products where they can receive un-disclosed bonuses from the licensee AKA Bank Advisers. Then try to rip off the seller for the reduced level of income!!!!