Accounting firms have an opportunity to introduce a range of significant revenue-enhancing services under the new licensing regime that comes into effect on July 1, 2016, according to Count Financial.
Today in Sydney Count will formally unveil its response to the new licensing regime, and in the lead up to that announcement the Commonwealth Bank-owned licensee has produced a White Paper outlining its planned solution and setting out the key issues facing accountants.
The Count solution includes “accountant authorised representative” and “full authorised representative” options priced at, respectively, $5000 a year for the first three years with an option to transition to “full authorised representative” status; and $10,000 a year plus $1365 for each additional authorised representative.
Count says that regardless of the regulatory changes ahead, accountants are already under sustained fee pressure from competition, technology and changing client demands.
It says the decisions that accounting firms make now will affect both the direction and the ultimate success of those firms in future.
“For accountants that embrace the opportunities presented by an evolving regulatory and business environment, there is significant potential for growth though the provision of higher value-adding services for their clients, in particular financial advice,” Count says.
In February a director of Bowler Consulting, Kath Bowler, told the SMSF Professionals’ Association of Australia (SPAA) national conference that changes to the licensing regime were “a perfect storm” for accountants.
Bowler, previously national development manager for the AMP-owned licensee SMSF Advice and a former financial planning manager for CPA Australia, told the conference that accountants are being forced from one direction by the end of the accountants’ licensing exemption, 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,” Bowler said.
“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.”
This convergence between financial planning and traditional accounting is also highlighted in the Count White Paper.
“This convergence is likely to see a significant shift in how the two industries work together and may in the longer term result in a complete amalgamation of the two industries, with a broad suite of financial advisory services being provided to clients within a diversified financial services (rather than an accounting or financial planning) firm,” it says.
“This convergence prompts a number of key strategic decisions for both accountants and financial planners. For accountants in particular, the removal of the accountants’ exemption represents an opportunity to embrace the changing environment and establish a business model that will provide a strong platform for client retention and business growth.”
The White Paper concludes that accountants need to think strategically about the future of their business.
“The addition of higher value-adding services, particularly the provision of financial advice, will not only add value to their clients, but further deepen client relationships and enhance the overall value of the accounting business,” it says.
“Now is the time for accountants to set themselves up for the future. The key will be to determine where they want to take their business and choose the solution that provides them with the best chance of success.”
