Accountants doing away with time-based fees

CBA Marc Totaro accountant

19 June 2018
| By Hannah Wootton |
image
image
expand image

The Commonwealth Bank (CBA) has predicted a 12 per cent decline in the use of time-based fees by accountants over the next two years, as almost 90 per cent of firms attempt to diversify their service offering.

The latest Commonwealth Bank Accounting Market Pulse found that time-based billing would go from representing 62 per cent of overall firm billings to 50 per cent. At the same time, accountants were looking to grow the proportion of fixed fees, value-based fees and retainers over those two years.

At larger firms, time-based and fixed fees already almost accounted for the same portion of revenue on average, at 42 and 38 per cent respectively. The same firms forecast that, for them, time-based billing would represent just 28 per cent within two years.

CBA’s national manager of professional services, Marc Totaro said that the shift could benefit firms as there was demand for more transparent fee structures.

“Industry feedback suggests that a push among firms for greater fee transparency and predictability has been largely driven by clients, but it can also bring significant benefits to firms themselves,” he said.

“Through replacing time-based fee structures with other remuneration models, firms can harness efficiency and automation to sustainably enhance profitability, while continuing to deliver superior value to their clients.”

The report also found that accountants have confidence around future business conditions, with a net confidence reading of 51 per cent in 2018, up from 33 per cent last year. Firms expected conditions to improve within the next year before moderating the year after.

Read more about:

AUTHOR

Recommended for you

 
sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

 

MARKET INSIGHTS

Old Fella

Of course a survey commissioned by an adviser coaching business would find that having an external business coach is a k...

12 hours 46 minutes ago
One foot out the door

A financial planner is expected to earn between $95,000 and $120,000 per year, depending on the state. Really? I don't...

22 hours ago
JOHN GILLIES

The whole thing is a bit frightening especially the last note where notes on what might be done could result in the need...

1 day 19 hours ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

1 week 6 days ago

A former financial adviser has been banned by ASIC from providing financial services for inappropriate advice, among multiple breaches....

4 weeks ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

6 days 21 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND