Providing financial advice and accountancy services side-by-side in a holistic approach offers an array of benefits for both clients and the business.
Research from HUB24 previously highlighted that high-net-worth individuals (HNWIs) are seeking to use a financial adviser as part of a professional network of specialists, including accountants, brokers and lawyers.
Advisers can often act as a “connector” between various specialists and offer expertise on matters involving from portfolio construction to succession planning.
“We believe accountants and financial planners will cohabitate because the accounting industry’s foray into the planning industry is only starting,” John Birt, founder of Radar Results, previously said.
Speaking with Money Management, three integrated financial services firms that offer both advisory and accounting services have shared the key advantages of bringing these two professions together.
Paul Barrett, founder and CEO at AZ NGA, said the company remains interested in businesses which have successfully integrated this model as it leads to a “superior consumer outcome”.
“The generalist model has been challenged now, and what we have to do is build a house of specialties. In our view, a diversified firm is a house of specialists,” he told Money Management.
For Barrett, one of the key benefits of providing advice alongside accountancy is the efficiencies it brings to the business.
“If you just have one provider, then they will have a client record across the entire group, so when the client goes to see the accountant after the adviser, they already know who you are. The consumer only has to go to one physical place and you get this central data sharing capability.
“You ultimately get a deeper relationship with the client and therefore you can actually start to anticipate what the client’s needs are going to be.”
Prime Financial is another firm which has brought its wealth management and accounting divisions together to provide its clients with an integrated solution.
Simon Madder, the firm’s managing director and chief executive, shared that the model prevents clients from repeating information to two separate specialists, enabling them to receive everything under one roof.
“When it’s done well, it must feel nice to not have to repeat what your goals and objectives are to both your accountant and financial planner. We have always philosophised that our clients are in a better position when they come to one organisation and get pretty much everything they need,” he explained.
“That integrated model gives you a better chance of there being fairer fee-for-service outcomes and more connected services which serve your ultimate goals. I find it hard to believe that you can get a better outcome when it’s all fragmented.”
Money Management also spoke with People & Partners, an integrated financial services firm which provides wealth management services alongside accountancy.
Tony Davison, partner at People & Partners, said: “Clients want one group of people to be across their entire affairs and want a coordinated approach between their adviser and accountant.
“They don’t want an adviser to be suggesting this strategy but then having to go and explain it to their accountant externally. One of the benefits is that you don’t have two isolated strategies.”
As a senior adviser, Davison added that he can’t imagine doing anything other than working hand in glove with his clients’ other professionals.
“Once the collaboration has started, it’s great. I literally drop by to talk to the accountants maybe five or six times a day about our clients. I always know there’s an accountant or a tax specialist close by with whom I can bounce ideas off and discuss strategies with.”
However, AZ NGA’s Barrett reminded firms who may be interested in embarking on the integrated model journey that “it’s not easy”.
“As the saying goes, ‘the road to hell is paved with good intentions’. I’ve seen a lot of firms who have never attempted to do it before and they actually take value away or destroy value from the core business, because they have underestimated the change management and the project management required to actually execute the strategy.
“The theory is simple enough, but the execution is difficult. That’s why these really successful integrated firms don’t grow on trees.”
I suggest an attractive alternative is to foster a collegiate advice response, with each entity (accounting, financial, estate planning etc) still remaining independent, without an added corporate overhead to support, and strictly client focused. This could be achieved by ‘collegiate’ entities agreeing to empower and prepare all clients through personal longevity planning (where time is the bottom line). Each entity is then working as part of a team for the client, with a genuinely holistic outcome underpinned by each person’s (and their partner’s) longevity plan. With excellent communications now available, increased aggregation can be less attractive and more prone to dis-empower advisers and clients.
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This model worked beautifully for the banks!