Jose Alguera-Lara of Australian firm ASV Wadeson is adamant the days of loose Accountant-Financial Planner alliances are over and joint ventures focusing on delivering value-add services will be the future. In order to be successful, however, he says some important fundamentals need to be in place first…
Accountants have been very fortunate to be perceived as trusted advisers and the industry wears this label with pride. But the time has come to acknowledge that this trust is a significantly under-utilised asset and wasted opportunity when most accountants don’t really provide advice.
Furthermore, both accounting and financial advisory professions are facing the very same War for Talent crisis as accountants and planners departing the industry are not being replaced by new entrants at the same rate.
Compounding the situation are expectations of time poor clients demanding one-stop-shop holistic advice businesses that deliver more relevant, comprehensive and higher levels of value-add services.
It’s for this reason that Accountant-Financial Planner JVs are gaining momentum as the previous loose ‘alliances of convenience’ between the two professions are rapidly losing favour.
For the accounting sector in particular, this change is both profound and daunting as the days of the singular focus on providing traditional taxation and compliance related services is no longer a sustainable business model.
In fact, I would go so far as to say it’s a question of survival for accounting practitioners and in Darwinian terms, “those who aren’t willing to adapt risk being left behind…or worse”!
Historically, the insurance/wealth creation advice provided by financial planners has focused on achieving long-term outcomes/goals such as financially secure retirement whilst simultaneously protecting against unforeseen contingencies, ie sickness, illness or death.
This dual focus of wealth creation/protection continues to this day in a more rigorous, regulated profession that’s underpinned by academic qualifications, a new code of ethics regime, strong compliance, transparency, ongoing professional CPD and technical study.
…many accountants continue to cling to an incorrect and outdated perception of the financial planner
Regrettably one of the JV roadblocks is that many accountants continue to cling to an incorrect and outdated perception of the financial planner. As a result:
- They lack a proper appreciation and understanding of the financial planning process
- They are not benefiting from the adoption of the long-term approach and mindset that planners use in their businesses
Time poor consumers, HNW clients and SMEs are receptive to the concept of the ‘one-stop-shop.’ They expect a multifaceted approach that goes beyond compliance related services to ensuring the viability of their commercial venture – as well as their personal long-term financial well-being and prosperity.
For any CA/CPA/IPA or similarly qualified accountant to provide a full suite of services including financial advice to their clients is a daunting undertaking that requires: multiple licenses and registrations; attaining numerous qualifications and designations; adherence to a myriad of regulatory education; new ethical standards and CPD requirements; and the list goes on.
However, the Accountant-Planner JV which is the creation of two parent businesses establishing a commercial enterprise allows each individual practice to achieve more together than they would on their own.
In many cases the benefits have been instant with both the JV and parent partners able to tap into new sources of business and revenue streams, marketing, resources, and knowledge that would be impossible in a solo venture.
Our experience at ASVW is that Accountant-Planner JVs are the future as they facilitate the realisation of potential with benefits including scale, innovative client solutions, client retention, access to new markets and ability to pool valuable expertise and resources – in short, a professional services game-changer.
But, in order to realise this potential, it requires choosing the right partner for the undertaking – a task that requires both parties to have:
- Clearly defined objectives
- Compatible operational ecosystems
- Access to latest technology and streamlined administrative processes
- A corporatized business model
- A defined business plan (including exit and succession pathway for the principals)
- Insight and understanding of client expectations and service deliverables
Most importantly, the JV needs to be a true partnership where the Accountant and Financial Planner have come together for one reason and one reason only – and that is to look after the client’s best interests. This is obviously better achieved under the one brand to give the client comfort.
…the first challenge of a JV is choosing the right partner
Although on the surface it might seem achievable, in reality the first challenge of a JV is choosing the right partner.
For an organisation like ASVW that comprises both accounting brands and an AFSL we work with both Accountants and Planners within our network to ensure both parties are a good fit with similar core values and objectives.
JVs also require constant nurturing to evolve and prosper – and that’s another benefit ASVW provides by assisting and guiding the two parties with on-going support and guidance, especially in the early stages of the process.
In closing, for a number of reasons, Financial Planners and Accountants have not worked well together and when forced to do so, chose informal alliances of convenience.
But times have changed, and I am absolutely convinced that Accountants and Financial Planners working together in JVs is the future for the simple reason that both work best when they join forces and combine their enormous range of financial knowledge, experience and expertise to deliver superior benefits and outcomes for clients!