Planners and accountants to converge: prediction

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Failure to follow a growing trend and converge planning with accountancy is a wasted opportunity that could see you retire with a much smaller business.

This is according to John Birt, principal of Radar Results, a consultancy that provides advice to financial planners and accountants in the area of expansion organically or by acquisition.

Birt told Wealth Professional that he’s watched a growing trend of planners wishing to join with accountants and vice versa because of the business opportunities the convergence offers.

There has also been a big shift in the once negative perceptions held between the two professions, he said.

He’s currently involved in six to eight transactions or mergers between planners and accountants, and has also recently been in talks with one of Australia’s biggest wealth management institutions that have stated future plans involve buying into accountancy practices.

“Two years ago I remember they said ‘our planners would not be interested in that’,” he said. “Large institutions [once] not keen on having the planning practice buy accountancies have changed their tone and are all for it.”

Birt predicts that the future trend in financial services will be a merge between accountancy and planning, as well as cross-specialties, which will see planners training in accountancy and vice versa.

Part of this trend is due to the lower multiples of accounting practices, which makes it an attractive offering for planners to buy the business and turn taxation clients into financial planning clients.

“When they retire they’ll probably get a lot more money for the financial planning section than the accounting section,” he said.

Another major driver of change will be the lifting of the accountants’ exemption to advise on SMSF on 1 July 2016.

This will compel accountants to either get licensed or bring financial planners into the business, something which traditionally has always been commissioned externally.

“It’s an interesting area. This licensing is going to really put pressure on accountants. They should get licensed, and if they don’t they should network with another planner,” said Birt.

And while he reckons that there will always be planners or accountants who dig their heels in or want to stay boutique, those will be few and far between.

“They say financial planners and accountants haven’t mixed for 30 years, but I think things are changing. Planners are now more trusted by accountants,” he said. “They will join together a lot more over the next five to ten years and there’ll be a huge convergence of the two practices. It’s going to happen for sure.”


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