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It’s inevitable accountant-planner joint ventures will increase — but basic fundamentals needed first

Accountants have been very fortunate to be perceived as trusted advisers and the industry wears this label with pride. But the time has come to acknowledge that this trust is a significantly under-utilised asset and wasted opportunity when most accountants don’t really provide advice.

Furthermore, both accounting and financial advisory professions are facing the very same war for talent crisis as accountants and planners depart the industry, they are not being replaced by new entrants at the same rate.

Compounding the situation are expectations of time-poor clients demanding one-stop-shop holistic businesses that deliver more relevant, comprehensive and higher level of value-add services.

It’s for this reason that accountant-financial planner joint ventures (JVs) are gaining momentum as the previous loose ‘alliances of convenience’ between the two professions are rapidly losing favour.

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For the accounting sector in particular, this change is both profound and daunting as the days of the singular focus on providing traditional taxation and compliance related services is no longer a sustainable business model.  

In fact, I would go so far as to say it’s a question of survival for accounting practitioners and in Darwinian terms, “those who aren’t willing to adapt risk being left behind…or worse”!

Historically, the insurance/wealth creation advice provided by financial planners has focused on achieving long-term outcomes/goals such as financially secure retirement, whilst simultaneously protecting against unforeseen contingencies i.e. sickness, illness or death. 

This dual focus of wealth creation/protection continues to this day in a more rigorous, regulated profession that’s underpinned by academic qualifications, a new code of ethics regime, strong compliance, transparency, ongoing professional CPD and technical study.

Regrettably, one of the JV roadblocks is that many accountants continue to cling to an incorrect and outdated perception of the financial planner.  As a result:

  1. they lack a proper appreciation and understanding of the financial planning process; and 
  2. are not benefitting from the adoption of the long-term approach and mindset that planners use in their businesses.

Time-poor consumers, HNW clients and SMEs are receptive to the concept of the ‘one-stop-shop’. They expect a multifaceted approach that goes beyond compliance-related services to ensuring the viability of their commercial venture — as well as their personal long-term financial wellbeing and prosperity.

For any CA/CPA/IPA or similarly qualified accountant to provide a full suite of services including financial advice to their clients, is a daunting undertaking that requires multiple licenses and registrations; attaining numerous qualifications and designations; adherence to a myriad of regulatory education, new ethical standards and CPD requirements; and the list goes on.

However, the accountant-planner JV which is the creation of two parent businesses establishing a commercial enterprise allows each individual practice to achieve more together than they would on their own.  

In many cases, the benefits have been instant with both the JV and parent partners able to tap into new sources of business and revenue streams, marketing, resources, and knowledge that would be impossible in a solo venture.

In short, a professional services game-changer.

But, in order to realise this potential, it requires choosing the right partner for the undertaking — a task that requires both parties to: 

  1. have clearly defined objectives; 
  2. compatible operational ecosystems;
  3. access to latest technology and streamlined administrative processes;  
  4. a corporatised business model; 
  5. a defined business plan (including exit and succession pathway for the principals); and  
  6. insight and understanding of client expectations and service deliverables.  

Most importantly, the JV needs to be a true partnership where the accountant and financial planner have come together for one reason and one reason only — and that is to look after the client's best interests. This is obviously better achieved under the one brand to give the client comfort.

Although on the surface it might seem achievable, in reality, the first challenge of a JV is choosing the right partner.

In closing, for a number of reasons, financial planners and accountants have not worked well together and when forced to do so, chose informal alliances of convenience.

But times have changed, and I am absolutely convinced that accountants and financial planners working together in JVs is the future for the simple reason that both work best when they join forces and combine their enormous range of financial knowledge, experience and expertise to deliver superior benefits and outcomes for clients!

Jose Alguera-Lara, co-founder and director, ASV Wadeson Chartered Accountants

It’s inevitable accountant-planner joint ventures will increase — but basic fundamentals needed first
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Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.

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