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Kiwi accountants not planning to follow Australian lead into financial advice

Australian accountants are being helped into financial advice but on this side of the ditch, number-crunchers say they are happy to work alongside investment advisers.

Friday, April 8th 2016, 6:00AM 1 Comment

by Susan Edmunds

CPA has issued suggested costs for accountants wanting to operate financial planning business under its ASIC-issued license, assuming it receives one.

The CPA Australia Advice pricing model starts at A$695 a month for a basic adviser package, rising to A$1250 a month for a level two Strategic Adviser package and A$1760 for the Comprehensive Adviser package. That includes xplan software licensing.

Kirsten Patterson, country head for Chartered Accountants Australia and New Zealand, said while the New Zealand industry was aware of the changes in Australia, the New Zealand regulatory and superannuation regimes were quite different.

“Any of the changes on that side of the Tasman need to be seen against that backdrop.”

She said accountants were experiencing changes in technology and more of a focus on their role as business advisers, not just number crunchers.

But she said accountants were more likely to work alongside investment advisers to serve their clients than they were to branch out into full-scale financial planning.  “We are seeing chartered accountants as conduits bringing groups together,” she said.

Accountants were often seen as a way into small business communities by people who wanted to target their client bases, she said.

Adviser Robert Oddy said it would be interesting to see how CPA managed offering xplan to multiple practices. “They may find things are more difficult than they expect.”

He said New Zealand’s specific education requirements for financial planners were probably the biggest barrier to accountants entering the field more seriously.

At present, they are exempt from the Financial Advisers Act (FAA) if the financial advice they offer is incidental to their course of business.

But pure financial advice services would require them to hold the level five qualification and register as AFAs.

“It all depends on the outcome of the FAA review of course,” Oddy said. “That’s anyone’s guess at this stage.”

Fred Dodds, of the Institute of Financial Advisers, said accountants had what many advisers would want: A client base, knowledge of their financials and a good reputation.

"If an accounting firm, large or small, made a decision to seriously enter the financial advice market, then getting qualified would not be an issue for them they would just do it. You would imagine that they would concentrate on the higher end of the market , financial planning and business insurance. Perhaps this is a real opportunity for advisers to recognise this and establish real business arrangements with accountants."

Tags: accountants Financial Advisers Act

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Comments from our readers

On 8 April 2016 at 3:47 pm Scott Alman, Managing Director, Consilium said:
Fred is correct. Accountants are often the most trusted professional relationship of the mass affluent. It’s interesting to read the views above. Consilium has worked successfully with a number of accounting firms in NZ to organically grow wealth management divisions. Consilium provides an end to end fee only solution (including XPlan) for client centric accounting firms. Accountants are typically disinterested in any business model based on product sales. It is considered an anathema to their longstanding role as a trusted adviser. Accountants have built their professional reputations over many years and have no wish to jeopardise that. However, firms who see wealth management as an equal discipline within their business can be extremely successful. For that to happen all partners need to trust the advice model and the quality of the client experience that model will deliver. Any model built on products, sales volume or investment “gurus” who promise (and charge) much more than they deliver, will fail to gain traction with true professionals. Models that focus on the attainment of client goals, through robust, evidence based and cost effective investment management, will dominate in this space. This is already a clear trend overseas and the NZ experience will be no different.

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