Granting AFS licenses to accountants will spur accountants and financial planners to work more closely together – perhaps under the same roof.
This is the assessment of Institute of Chartered Accountants in Australia head of financial advisory services Hugh Elvy.
Speaking to Wealth Professional, he stated that the issue of accountants gaining limited AFS licenses should be viewed as an opportunity for financial planners to build professional relationships and drum up business.
“Is there an opportunity? I think the answer to that is ‘yes’,” he said. “Something like 75% of Australians have a relationship with an accountant just to do their tax of some kind, then obviously there’s an opportunity.”
“The licensing process and so on – and how they’ll operate under the licensing process – will also offer accountants an opportunity to get a better understanding in terms of the value that financial planners provide, and what financial planners actually do,” he added.
“So I think in many ways it will actually provide almost a motivation and opportunity, in many cases, for accountants and financial planners to actually work more closely together.”
He believes that the new licensing regime will give chartered accountants, for example, an opportunity to provide more information to consumers and improve their financial literacy. This, he claims, can enhance the relationship between consumer and planner when the time comes for them to seek more detailed financial advice.
“I think there is that sort of opportunity whereby the advice that’s provided by the accountant is some initial strategic advice and issues, and therefore the client has more buy-in to see what the value is of going for a full financial plan – and obviously going to see a financial planner,” he said.
A large number of accounting practices operate with financial planners who aren’t accountants, Elvy explained, adding that this combined practice model could well be on the increase.
“I would suggest, with these changes and do forth over the next couple of years, like everyone when there’s change – and financial planners have done the same thing because of FoFA – you obviously consider what your offering is, what service you want to provide your client on an ongoing basis,” he said.
“There’s the opportunity there to look at those offerings, what are you going to offer, and how are you going to do it. The reality is that more and more people have got superannuation, and it’s becoming a larger component of anyone’s position.
“So as a result of that there are going to be more questions and more advice. That’s a terrific opportunity for both accountants and financial planners.”
Elvy added, however, that it’s not just a case of accounting practices taking on financial planners – as there are also financial advice practices who are looking to diversify and bring accountants on board.
“What are my service offerings, and how do I deliver a greater service to my clients? That may well include incorporating accounting services,” he said.
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