With consumers increasingly looking for a more holistic set of services and financial advisers facing incoming professional standards, offering financial advice as well as accounting services is proving to be a good fit for accounting firms.
Connect Financial Service Brokers chief executive Paul Tynan said that following the Hayne royal commission, incoming professional standards for advisers and some of the threats to traditional compliance work performed by advisers, there is a lot of opportunity for financial advisers and accountants to come together under the one firm.
Mr Tynan said a lot of the technology changes mean that many accountants are transiting to business advisory and away from compliance work such as completing tax returns as this is increasingly being performed by technology or outsourcing.
With some of the changes happening in the accounting space, the addition of financial planning services to accounting firms is a “natural fit”, he said.
In the past, it has mainly been rural based-firms that have offered both the accounting and financial advice services because of the limited options their clients have in those areas, he said.
“It’s starting to happen more in the city areas now though because the consumer walks in the door and they just want advice and now that they know that advice is fee for service that’s all they’ve looking for,” he said.
“So, I do see the accounting business model moving more and more to provide some type of financial planning advice and that’s going to be driven because of the need, but also on the financial planning side there is a very good chance that you're to have at least 40 per cent of current advisers leave in the next three to four years.”
Mr Tynan said the two disciplines can work together well, and its now very hard to be both with the income standards for advisers so there needs to be a “coming together”.
“The need for advice is going to skyrocket as all the Baby Boomers reach retirement,” he said.
“The ones that keep on doing what they've been doing for a long time in the compliance space are going to struggle and they won’t be equipped to take advantage of the opportunity around the financial planning space.”