David Clatworthy, accounting segment head at Macquarie Group, said: "It's a perfect storm. Compliance work and other traditional revenue lines are drying up for accountants."
He added: “Accountants are transitioning from a compliance-based service model to more advisory in the hope they can maintain and increase fees. This transitioning will bring them closer to a financial advice model.
"As boundaries blur, accountants and financial planners are eyeing off each other's turf. Meanwhile, time-poor consumers are wondering why they can't have a one-stop financial advice shop. Yet while convergence makes plenty of sense on paper, the real-world practicalities are challenging."
With a diverse and broad service attracting a higher practice sale price and a more diverse revenue base, Mr Clatworthy added that acquisitions are firmly on the radar for both industries.
“Organic growth for both accountancy and financial planning firms is slow, so there’s more interest in acquisitions.”
Mr Clatworthy was quick to note, however, that the likelihood of a new acquisition not being successfully integrated is “massive”.
“To do it right requires a significant change management program. Bringing an accountancy and financial advisory business together can result in years of problems. These problems can result in the two parts of the business demerging and going back to specialising.”
Rob Hayward, head of client solutions for the Macquarie Virtual Adviser Network, noted that in terms of risk compliance, accountants have long enjoyed a system that closely mirrored self-regulation; but changes to SMSF advice will lead to a higher level of monitoring and regulation.
Mr Clatworthy agreed, noting that “typically, accountants look backwards, with a compliance focus”.
“If you look at a tax client-based firm, what they do is reactive; it is about the previous financial year. An adviser, in contrast, is always looking to the future and trying to help their client achieve their financial goals,” he said.
The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day