The right match: finding a financial advice partnership that complements your accounting business

3 min read

Many accounting firms are assessing their options to meet the increasing demand for financial advice services, particularly in light of changes to licensing requirements for accountants and demand for self-managed superannuation funds (SMSFs).

Even those who have chosen to license themselves to offer these services face capacity challenges in providing financial advice while remaining compliant. One option is to partner with an external financial advice firm, but finding a suitable partner can be difficult for many accounting firms.

Using external financial advice services

Research by BT and Investment Trends (released in February 2018) found that 40% of accountants would consider outsourcing their financial advice services or have in the past, while 36% currently refer clients to an external financial advice firm1.

The right partnership can be rewarding, with 23% of accountants reporting an annual increase in revenue, averaging 14% growth1. However, taking a selective approach has been crucial given the trust relationship involved and reputational risk.

Accountants report typically looking for the following top four factors in a financial advice firm: fee transparency, a good reputation, good customer service and support and experience in dealing with SMSFs1.

It can be difficult to find where to access this information. Some accountants may have considered word of mouth from their own client base or steering clear completely of sourcing a partner, encouraging clients to find their own financial advice given the challenges.

The difficulty in this approach though is that collaborating on a client’s needs can be much harder in this situation, compared to one where firms have established clear plans and guidelines for working with joint clients.

Planning the partnership

For those accountants considering finding an external financial advice partner, it can be worth considering the points below to fine-tune the search and ensure any eventual partnership works properly.

1) Client base and specialisation

Sharing similar client bases can help create a complementary servicing approach to clients and feel more collaborative. For example, accountants with an older client base might consider financial advice partners with a speciality in retirement and estate planning.

2) Terms of partnership

Accountants might want to consider whether to take a formal or informal approach to any relationship with external financial advice firms. Some might consider joint ventures, which can offer legal boundaries and protection, but it’s worth noting that legal partnerships like this can be more difficult to exit if either party chooses to later. Even in an informal approach, it can be helpful to note out on paper some base expectations for each partner, such as two-way referrals or collaborating on clients and sharing of relevant information.

3) Communication and collaboration tools

Using similar operating systems can be helpful in a partnership – but if not, it may be valuable to research and identify suitable tools to use to collaborate on clients and securely share information and whether there is one form of technology that both could consider accessing.

Mining the channels

One of the greatest challenges for accountants in establishing a partnership is where to start looking.
Some options to consider are below.

1) Phone and interview

Though time-consuming, looking up the businesses in the same area as the accounting firm and booking an appointment can offer a good starting point. Businesses in the same area may be more likely to have similar client demographics, though meeting to discuss will uncover exact specialities.

2) Recommendations and networking

Asking clients and other business contacts about their experiences and recommendations can also offer insight into which businesses might share similar values and complementary services for an accounting firm to approach.

3) Professional industry bodies

Some industry bodies, like SMSF Association, include members from both accounting firms and financial advice businesses allowing those considering partnerships to narrow based on a shared speciality. Accounting firms could also look at professional industry bodies specific to financial advice, such as the Financial Planning Association (FPA) or Association of Financial Advisers (AFA) to gather information.

4) Financial services businesses

Some of the financial services providers that accounting firms already work with may have relationships with financial advice businesses and could assist with introductions. For example, BT Financial Group has networks with both external and in-house financial advice businesses with a range of specialties, client bases and locations and could help with referrals to suitable options based on the needs of the accounting firm.

As with most things, it can be a substantial time commitment to identify and partner with an external financial advice business and not a decision taken lightly. That said, planning ahead and narrowing down prospects can make it a more efficient search.

1. BT/Investment Trends SMSF Accountant Report 2018. Survey conducted between 15-28 January 2018 with 185 respondents (136 with 1-50 SMSF clients, 48 with more than 50 SMSF clients). Maximum sampling error at the 95% confidence interval for the sample is +/-7.2%.

This information has been prepared by BT Portfolio Services Limited ABN 73 095 055 208 AFSL 233715 (BTPS) and is current as at 26 February 2018. The information provided is general in nature and does not take into account your objectives, financial situation or needs and therefore, before acting on it, you should consider whether it is appropriate for you It may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, neither BTPS nor any other company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. Past performance is not a reliable indicator of future performance. You should consider whether or not provision of SMSF financial advice services is appropriate for you. ©BT Financial Group 2018.

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