Accountants are in the box seat to capture a significant part of a newly emerging “advice space” being driven by legislative changes affecting both financial planners and accountants, according to Kath Bowler, director of Kath Bowler Consulting.
Bowler said accountants are being forced from one direction by the end of the so-called accountants’ licensing exemption in 2016, and financial planners are being forced from the other direction by the requirements of the Tax Agents Services Act (TASA).
“There’s the emergence of the advice space [in the middle], where you have to be licenced in both areas – and it really is up for grabs for planners and accountants, for anyone who wants to take it. But for accountants, that opportunity isn’t going to be there forever. If you want to take it, it’s there now.
“For those that do not embrace this future of advice space…they will be pushed back into compliance-based work, unless they can come up with a specialist or niche area that they’re going to operate in. And I think the same will occur for planners who choose not to embrace the advice space – unless they go down the specialist path, they will be pushed back into some sort of product sales area.
Perfect storm
“There’s a perfect storm for accountants. You’ve got changes in the licensing; you’ve got the SMSF segment, which is now the largest segment of the superannuation market, and 90 per cent of self-managed super funds have a relationship with an accountant. You are in the perfect box seat, if you want to take it, to own or have a significant influence in this advice space going forwards.”
The issue of the business model of the future was debated in a later plenary session, where Adam Goldstien, a director of Skeggs Goldstien, said changes occurring in financial planning the verge of creating a new advice professional”.
“I think accountants, quite frankly, are looking a gift horse in the mouth, and if they do not take advantage of this opportunity, it’s probably never going to come around again,” Goldstien said.
“I think accountants are in the box set to take advantage of and own this advice space.”
Five options
But Brett Kenny, a partner in accounting firm Rogerson Kenny, said when the end of the exemption was signalled his firm faced five options: exit the business; wait and see if the exemption really is removed; obtain a full or limited AFSL; seek a partner; and become authorised representatives. He said the partners have opted for the latter option but intend to remain a specialised, unaligned accounting business.
Kenny said the firm was not at risk of being “eaten alive” by the emergence of integrated businesses.
“We take a contrary view,” Kenny said.
“We like to do what we do well. We leave financial planning, we leave the estate planning and law work to experts. In terms of the business model, we find it works better for us. Because we’re unaligned – a rather crude analogy – we’re at the dance and we can dance with all the girls.”
Opportunity, not threat
Bowler said accountants should view the end of the licensing exemption as an opportunity, not a threat.
“Licensing is forcing you, but it’s forcing you to have a look at the opportunities that present themselves, and then you take control of the decisionmaking process – working out what you want to do and where you want your business to go, and then looking and finding the licensing solution that’s going to get you there – rather than letting licensing drive you,” she said.
Craig Meldrum, head of financial advice for Australian Unity, said it is “really, really important to understand what the implications are” of each of the licensing options they have.
Meldrum said the task of obtaining a licence, whether limited or full, requires planning and careful management, and should not be left until the eve of the exemption expiry.
