Speaking to Accountants Daily, Macquarie chief investment officer John O’Connell said that with accounting software eliminating many of the mundane or number-crunching tasks, and developments in the fintech space now focused on investment, the services offered by financial advice firms are under greater threat.
“A lot of the mundane tasks done by accountants were reduced many years ago [by the accounting software companies],” said Mr O’Connell.
“The new crop of services and fintech services – you’re really talking about investment services – accounting firms haven’t provided those investment services in the past; so for accounting firms, it actually opens up a potential improvement or a wider array of services.”
Mr O’Connell said that in the past accountants tended to avoid investment services as they didn’t have enough time to monitor markets.
“[Now accountants have] really solid engines that are actually able to help them understand what’s happening in markets and help them make those decisions,” he said.
“That is a fantastic marriage made in heaven for an accounting firm, and that’s the area that will expand their focus, in terms of advisory firms.”
While Mr O’Connell said he doesn’t believe accounting firms will completely bypass financial advisers, he said there may be an incremental shift away from them.
“I think you’ll find there will be more competition between those two channels in terms of being able to provide those two services for the clients,” he said.
“For example, if you use the limited licensing regime to do what I would term the ‘upstream advice’ – in other words the structuring, setting up the SMSF, the administration of it all – and then you use the robo-engine from the downstream day-to-day advice, then you’ve basically got the two licences working hand in hand.”