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Avoid missteps and adding another discipline to your practice can boost revenue, says consulting specialist.
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It pays to find the right model for financial advice
26 October 2022
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10 minute read
Adding financial advice to the mix can diversify an accountant’s income stream but could backfire if done poorly, says Elixir Consulting senior consultant and business coach Graham Burnard.
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Speaking ahead of the Accountants Daily Strategy Day 2022, Mr Burnard said without the necessary commitment the move could even result in losing money.
“This usually occurs if accountants don’t have a sharp focus on their services, or are not prepared to invest in it and do it properly,” he said.
“This could quite potentially drain their firm instead.”
At the Strategy Day in November and December, Mr Burnard will outline why a multidisciplinary firm could be a boon for accountants amid the ‘great resignation’ and the different models used to build one.
He will also run through the expensive mistakes to avoid.
For example, he warned that accountants who offer financial advice to every client would struggle to operate profitably because of the steep costs involved. Instead, he said advising clients who value the service and can pay fees is critical.
“Seeing it as a service for all clients who might want their superannuation or insurance reviewed becomes very problematic because of the high costs. You’ll find it difficult to charge the appropriate fee,” he said.
Some accountants had previously offered SMSF advice at breakeven or loss to their high-value SME clients, but Mr Burnard said this was no longer possible.
“There is so much compliance and the cost of that is so high now that you need to be prepared to charge appropriate fees rather than cross-subsidise,” he said.
Conversely, a well-run multidisciplinary firm could boost revenue and provide scale, he said, while ring-fencing the client base against poachers.
Mr Burnard said that because the business model of financial advice had changed, it could inject more value and income to accounting firms.
“In the past, you could build passive income from people paying trail commissions from their investments. It was lucrative without doing a lot of work,” he said.
“Those days have gone. Now, you have to service all your clients and charge fees for your work. So, it’s very profitable for firms that do it very well, have a great value proposition, and provide really good value to the client.”
Many accountants mistakenly believed financial planning was about discussing the top funds, where to invest money and which shares to purchase. But that missed the point, Mr Burnard said.
“It’s about future goals and objectives, retirement lifestyle, risks, and concerns. So, the penny will drop once they go through it themselves,” he said.
“Accountants then think, wow, this is a very different conversation.”
To hear more from Graham Burnard about how to unlock the potential of a multidisciplinary firm, come to the Accountants Daily Strategy Day 2022.
It will take place on 29 November at Grand Hyatt, Melbourne, and 1 December at Parkroyal, Parramatta in Sydney.
Click here to book your tickets and make sure you don’t miss out!
For more information about the conference, including speakers and agenda, click here.
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