Smithink director David Smith believes there is an opportunity for accountants looking to grow their business by taking a “solid look” at the financial planning space.
“I have a fairly strong view that over the next decade or so, we're going to see the accounting profession really being in a dominant position with financial planning,” said Mr Smith.
“The reason for that is firstly, accountants have that really strong relationship with clients which enables them to talk to clients about financial planning issues and secondly, because the remuneration model for financial planning is now moving back to a fee for service model rather than a commission based model — that’s the sort of model accountants are more comfortable with and sits more inside their business model.”
Further, Mr Smith believes the Financial Adviser Standards and Ethics Authority’s recently released guidance on the mandatory education pathways for existing and new financial advisers has instead driven up interest amongst accountants.
The new rules effectively shift the industry towards the base requirement of tertiary education, and require certain units — such as ethics and technical training — to be completed.
“With the financial planning profession's level of professionalism having gone up, I think that is something which is making accountants feel like it is something that fits inside their own business model,” said Mr Smith.
“But I think the bigger issue is the remuneration model, which accountants are more familiar with.
“With the banks being heavily challenged with the financial planning type service they have been providing, it is creating an opportunity for the profession to be the natural provider of these types of services.”
The battlelines between accountants and financial advisers remain clear, with sister site ifa reporting that Financial Planning Association head of policy and government relations Ben Marshan was encouraging advisers to “take the market share from accountants” with SMSF trustees.
“Financial planners should be absolutely backing themselves to be the experts in this space, it’s what planners do day in and day out, but it’s not what accountants do day in and day out,” Mr Marshan said.
Jotham Lian is the 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.