AccountantsDaily recently ran a straw poll asking respondents whether they have noticed a decline in clients seeking advice on their income tax returns.
From 478 respondents, 39.3 per cent said yes, they had noticed a decline in the demand for ITR advice.
Speaking with AccountantsDaily about the results of the straw poll, the Institute of Public Accountants’ Vicki Stylianou said that compliance work isn’t decreasing, technology is just providing clients with alternatives to going through their accountant.
“Compliance work is not drying up because red tape and regulation is not declining; but through technology, low-cost providers, competition and other market factors, it is becoming less profitable for some accountants and in some cases harder to obtain and retain,” Ms Stylianou said.
“This work has become highly commoditised and a loss leader for businesses like banks. This trend has been playing out for a while and will continue.”
Ms Stylianou recommended that accountants review their business models on an ongoing basis.
“IPA has been telling accountants for a long time now to diversify, specialise, find new markets, new clients, new business models, transform their practice, consider their business model, be more targeted, and to embrace the benefits of technology,” she said.
Skeggs Goldstien Accounting director Adam Goldstien added that there is not necessarily a decrease in clients seeking ITR advice, but an increase in clients seeking overall financial advice.
“I can’t say with any confidence that less clients are seeking advice in regards to their income tax return, but I can say with absolute certainty that more, many more clients are seeking advice with regards to their overall financial situation, of which their income tax return forms part,” Mr Goldstien said.
“Traditional compliance work is a confirmation as opposed to a planning process: it gives the client comfort in previous decisions they have made and [gives] them clarity that they are on track to achieve their goals,” he said.
“For this reason I don’t believe that advisers should move away from compliance work. Quite the contrary: compliance work is vital and valuable, it’s just not the only game any more.”