Research has shown that accountants are still the most trusted advisers amongst clients and a key influencer when it comes to client spending decisions, yet many are missing the opportunity to source finance on a client’s behalf.
By building this capability into their client offering, accountants can meet more of their clients’ financial needs, improve client retention and potentially boost their bottom line by increasing revenue per client.
There are several ways accountants can incorporate financing services into their businesses, so it’s important to consider the most suitable model. Here we explore and explain three common models available for accounting firms looking to take the next step.
The simplest option is establishing a referral agreement or strategic alliance, where the accountant puts their client in touch with a loan specialist directly.
This model often suits smaller accounting firms or those who want to maintain accounting services as their core focus.
When meeting with potential referral partners, accountants should consider aligning with finance brokers who have a similar business specialisation and customer base. For example, if the majority of your clients are small business owners, look for a partner who can assist with asset finance and commercial loans. Accountants should also ensure any strategic alliances which are formed align to their core business values and value proposition.
Another model we see many accountants use to diversify their business is to engage a finance broker to work within their business on a contractual basis. This is often the preferred option for accounting practices who are seeking to build client trust and loyalty by building out their in-house service offering.
A partnership could be established in various ways: by simply sharing office space and client information, or enabling the broker to operate under the same accounting brand, leveraging client trust.
Operating under one roof can offer several advantages. Accountants are able to introduce clients in person and immediately, hold regular meetings and share client information quickly and seamlessly. This can be particularly advantageous in situations involving complex loan structures, such as a multi-property deal or a large business expansion.
For more established accounting practices, fully integrating financing services into the business presents an opportunity to leverage strong client relationships and provide a holistic financial offering.
There are currently a number of factors shaping the way the financial industry is evolving, with time-poor clients demanding greater choice and speed of service. Businesses are constantly under pressure to seek efficiencies and meet greater compliance expectations. For many accounting firms, a focus on the future means expanding into a multi-disciplinary business model or a ‘house of specialists’ that may include accounting, lending and financial planning – all under one roof.
Incorporating financing services into your business can require a considerable upfront investment, as businesses are effectively hiring new employees. However, the rewards in terms of client loyalty, cross-marketing and economies of scale can really pay off.
With all of a client’s data, from financial statements to trust deeds, secured within the one firm, significant efficiencies can also be created by reducing the need for multiple inputs, paperwork, meetings and calls. Freeing up your staff as well as your clients time.
Another key factor which is crucial when looking to fully integrate financing services into an accounting firm is engaging the right finance aggregator. Accounting firms should be looking for a finance aggregation business who are experienced in the requirements of an integrated financial services business and are willing to help accountants understand the best licensing arrangements to enable the firm to operate in the finance market.
Brendan Wright is the CEO of FAST Aggregation Services, a wholly owned subsidiary of NAB Group. Many FAST finance brokers have successful referral relationships with accounting firms and can help accountants offer a broader range of services to their clients. To find out more about how FAST can help your business visit www.fastgroup.com.au/numbers
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