The removal of the ‘accountant’s exemption’ in 2016 does not mean all accountants will need to become licensed as financial planners, according to BT dealer group Securitor.
No need to become a licensed adviser: Securitor
Speaking to AccountantsDaily’s sister publication InvestorDaily, Securitor's manager for strategic growth/offer development, Stevie-Ann Dovico, said it does not always make “good business sense” for accountants to become licensed – and establishing referral networks may make more sense.
Licensing accountants to provide financial advice brings with it all the complications of the FOFA regime, said Ms Dovico.
“That means increased administrative processes and burdens like writing a [statement of advice], which they haven’t had to do before. This process is not factored into their cost to serve, whereas financial planners have built this into their business model,” she said.
As a result, it often makes more sense for accountants to work more closely with financial advisers rather than becoming advisers themselves, according to Ms Dovico.
“The same outcome can be achieved by establishing a strong referral network between the accountant and financial planner or [by] bringing a financial planner in-house,” she said.
“Additionally, embedding a strong wealth presence into their accounting books adds an additional revenue stream and ultimately enables business growth.
“Considering that accounting firms sell at about 0.9 to one times revenue and financial advice businesses sell for about 2.5 to three times, integrating accounting and financial advice services makes sense,” said Ms Dovico.
Securitor currently offers accountants a range of licensing solutions ahead of the phase-out of the exemption, which currently allows accountants to advise on the set-up and closure of SMSFs.