Simplifying the business proposition for accountants wanting to move into financial advice is key to building effective partnerships, according to Fiona Navarro, general manager of Apogee.
Navarro believes partnerships between accountants and financial planning practices need to go beyond simple referrals.
“It can’t be ‘I refer you, you refer me’; there needs to be a deeper alignment,” she says.
“If the businesses are not aligned, it will never work.”
Creating this alignment lies at the core of the MLC Accountant Authority, the National Australia Bank-owned wealth management division’s new licensing offer for accountants.
“We have been establishing common ground,” says Navarro.
The new offer will be rolled out between now and July 2016, when accountants wanting to provide financial advice, including advice relating to self-managed super funds, will need to either hold an Australian financial services licence, or operate under an AFSL. The MLC offer gives accountants two distinct choices.
The first limits them to providing financial advice only on SMSFs. The other provides comprehensive authority to advise on broader areas, including investment and insurance products.
This supersedes the group’s earlier foray into the area, re-engaging with accountancy practices already identified and also reaching out to new practices.
Highlighting why such an approach is required, Navarro says: “You can’t afford to run a model where you haven’t got your eye on the ball.”
“If you really look at where things go wrong, behaviour evolves from business risk,” she says.
“What’s the stability of the business versus the stability of the advice?”
In terms of the scale MLC wants to achieve, Navarro says: “We’re not after massive numbers, but quality.”
Currently there are around 40 accountancy businesses in the program, which she estimates will grow to a maximum of between 200 and 300.
“We’re only interested in those practices with a long term approach,” she says.
A large number of Australian financial planning dealer groups are grappling with the issue of creating more systemised ways of engaging with accountants. Most of them clearly state they are seeking to be highly selective in choosing who they engage with.
Asked whether they can really all achieve this goal while still reaching a feasible scale, Navarro says, “I think there’s a decent size of the market that is already at that stage, in that category of accountants wanting to grow and evolve their business in this challenging environment”.
“The critical thing is, those accountants wanting to partner to a group, it’s really about their philosophy [and their] different culture and alignment piece.
“It’s really important that they can select a group that’s right for them.”
For accounting firms considering moving into comprehensive advice, MLC also provides support across education and accreditation, practice development management and professional indemnity (PI) insurance.
According to Navarro, access to the limited authority model costs around $5,000 plus GST, not including the PI insurance. The comprehensive model will cost considerably more, though varies substantially from between licensees.
