Speaking to Accountants Daily, Change Accountants and Advisers managing director Timothy Munro said the royal commission has opened an opportunity for accountants to jump into the financial advice space as trusted advisers.
“I still think the big sleeper issue post royal-commission is how can accountants properly integrate wealth advisory to assist their clients and I think that’s not being looked at closely by many accountants at the moment, yet their clients are crying out for accountants to help guide them in the wealth space,” said Mr Munro.
“I think accountants need to look at that and get their act together and start working out how they can provide wealth advisory services.”
However, he acknowledged there was hesitation in the profession, considering a host of new education requirements, set by the Financial Adviser Standards and Ethics Authority (FASEA), will be imposed on existing and new accountants and advisers who provide financial advice by 2024.
“The government or royal commission is going to have to work out a framework where the average mum and dad client can get advice that’s affordable and yet the adviser giving it can still make a profit because, at the moment, no one is really making a profit on financial advice when compared to the compliance burden,” said Mr Munro.
His comments mirror those of Chartered Accountants Australia and New Zealand group executive Simon Grant who believes accountants are being squeezed out of the financial advice space by the education reforms.
“We have a royal commission showing Australians that much of the advice provided by a vertically integrated system has been poor, to say the least,” said Mr Grant.
“Yet we have a body of professionals called Chartered Accountants, who are some of the most trusted advisers in Australia, being forced out of the industry due to additional proposed new study requirements. There seems to be a mismatch.
“The public interest will be best served by retaining accounting professionals in the financial advice industry.”
In the meantime, Mr Munro believes accountants should start considering wealth advisory services that do not require a financial license.
“There are a couple of things an accountant can do which doesn’t require a license – do a cash flow and tax forecast and a wealth forecast for their clients’ assets, liabilities and cash flow for the next 12 months into the next 10 years.
“Help your clients see how much money they are going to have coming into retirement, how much money they might need and that’s not financial advice where you need a license but clients pay good money for that because they’ve never seen where the rest of their financial life is going and I think that’s a starting point that all accountants should jump into.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.