Historically, however, the country’s financial advisory and accountancy professions have been in conflict on several fronts – or, at best, engaged in an uneasy truce.
Now, I’m not suggesting Australia’s financial planners and accountants need to craft a high-level peace agreement à la the Paris 2015 climate change accord, but it is time to recognise our industries share more common interests than competitive hot-spots.
In fact, the changing regulatory climate is driving the respective professions closer together than ever. And next June, when one of the last-remaining barriers between accountants and planners comes down, the arguments in favour of inter-professional collaboration will heat up even more.
The removal of the limited exemption from licensing granted to accountants for giving certain advice around self-managed superannuation funds (SMSFs) has, of course, been well-signalled; but that doesn’t mean all accountants are well-prepared for the change.
By the end of June 2016, all accountants who previously relied on the exemption – and still want to give advice around SMSFs – will have to be licensed in one form or another.
In short, well before next June, those accountants affected by the new licensing regime will have to select from the five following options:
- Stop giving SMSF advice;
- Apply for a limited Australian Financial Services Licence (AFSL);
- Apply for a full AFSL;
- Become an authorised representative of an existing AFSL; or,
- Refer SMSF advice to an authorised representative.
While accountants will have to make their own decisions on how to proceed in the post-June regulatory world – balancing the pain of licensing with the value to their businesses of SMSF advice – this rule of thumb could prove helpful. I believe if you are looking to establish 25 SMSFs or more a year, you should be licensed; any less, you should refer.
The big question for those accountants who choose to remain in the SMSF game though is whether to get their own licence to play or join with an experienced team.
In some respects, it is easy enough to get an AFSL – and these days there are plenty of firms providing cost-effective compliance services to those who go down the self-licensing route.
Nonetheless, I think accountants would serve their long-term interests better by collaborating with a reputable existing full-service licensee rather than going solo.
By partnering with experienced AFSL holders – such as MyPlanner – accountants will have immediate access to the compliance and business support infrastructure required to operate in the regulatory environment.
Ultimately, it is the clients who will reap the benefits as their accountants make a smooth transition to the licensing regime: ie, no business interruption plus the ability to provide a wider range of client services.
But working with an AFSL is not simply a way for accountants to find a tick-a-box compliance solution or to satisfy professional indemnity insurers.
I think the real benefits for accountants who opt to partner with an existing AFSL will accrue in more subtle ways: it’s about having people around you who challenge your thinking, who inspire you, who help provide solutions, and who help develop your ideas.
And, even better, this relationship can cut both ways. Financial planners can learn just as much from accountants about good business practice and client servicing.
I, for one, have frequently been inspired after witnessing the systems and processes some accountants have put in place in their businesses.
For example, I recently picked up two great ideas from an accountancy firm I visited, which we since implemented at MyPlanner: one related to streaming all internal documents electronically for clients; the other related to how they record screens for clients whilst explaining things on the phone (and emailing them to the clients after the call).
As well as changing how we do business, that brief trip to the accountant’s office also inspired me to take their brilliant ideas one step further by turning these processes into a business-to-client app for phones and tablets.
This cuts to the heart of what collaboration between accountants and financial advisers can achieve: and it’s why I’m certain 30 June 2016 represents a fantastic opportunity for our respective professions to put aside past differences and create a purposeful mutual future.
It’s worthwhile, too, to look outside our own, sometimes insular, industries for a wider perspective on the power of collaboration.
According to Australian entrepreneur and author, Janine Garner, collaboration – both between and within businesses – is the key to survival in a fast-changing world.
“For a company’s bottom line and processes to be viable in the age of information, a collaborative approach is vital for future-proofing when it comes to leadership style, team engagement and the thinking that drives the machine,” she says on her website.
But Ms Garner, who expounds her ideas in the book From me to we, says collaboration does involve effort.
“If we don’t keep the conversation going; if we don’t continue to discuss, to share, to tell our stories of what is important to us personally and professionally, to debate… and – here’s the crux of the matter – to talk with truth and honesty, then it doesn’t matter how much we want it, collaboration will never happen,” she says.
Now is certainly the perfect time for accountants and financial planning businesses to begin that conversation.
Other industries have proven that collaboration between unlikely partners can yield surprisingly positive results. For instance, the long-standing relationship between US space agency NASA and the famous Danish plastic brick manufacturer, LEGO, has built on its promise to “inspire kids to become the next generation of explorers”.
Likewise, a joint venture between Coca Cola and plastic bottle recycling firm ECO Plastics has contributed significantly to waste reduction by the world-leading fizzy drink maker.
Looking back a decade or more, who would have pictured Coke co-operating with an eco-warrior, or NASA plotting moon missions with a toy-maker?
Financial planners and accountants can overcome their historical conflicts by working towards industry collaboration to create client experiences that will be second to none.
Creating a more productive relationship between financial advisers and accountants may not be on the same scale as cementing a binding deal on global climate change. We may never have Paris, but it could be the start of a beautiful friendship.
Philippa Sheehan, managing director, MyPlanner
