Speaking at the Accounting Business Expo recently, My Accounts executive director Matthew Rowe said that the increased regulation for both accountants and financial planners is driving significant change in the advice space.
“What's important to understand is we all operate under some sort of licensing regime, whether that's through ASIC or through the taxation practitioners board, and these are regulatory in nature,” Mr Rowe said.
“If you're a financial planner, you’re now dealing with increased compliance requirements around FOFA and fee disclosure statements; or if you’re an accountant, you now have to be licensed to provide any form of advice around SMSFs.”
Most notably, from 2019 new financial planners will need to hold a degree or degree equivalent, and by 2024 existing financial planners must have also completed a degree or degree equivalent.
“Within financial planning, we know that there are new education standards, so financial planners now need to have a degree or a degree equivalent, and they will basically look like accountants with their educational standards and their requirement to have ongoing certification and CPD,” he said.
“There are estimates that approximately one-third of all financial planners will seek to retire in 2024 because they don't want to go back to school.”
While some professionals see the increased regulation and education requirements as a burden, Mr Rowe believes it provides an opportunity for accountants and financial planners to work together in the future.
“I believe that there is a huge opportunity to both compete and cooperate at the same time among accountants and financial planners,” Mr Rowe said.
“So I think it’s fair to say that consolidation in both sectors will continue.”