Accountants look to advice in cutthroat environment
Accountants are aggressively discounting to retain clients, with competition for compliance fees becoming more cutthroat, according to new research within Grant Bloxham's 2016 Bstar Accountants Research Report.
Despite the latest data from the Australian Securities and Investments Commission (ASIC) suggesting slower than expected take-up of the new accountants limited licensing regime, Bloxham's research suggests accountants actually do believe there are revenue opportunities in the advisory space.
"Practices are now valuing clients based on their lifetime value to the practice," he said. "Converting an existing client to an advisory client is a key growth strategy."
Bloxham said that client retention and growth rates were key to every practice's future and were the third highest business concern in 2016.
He said accountants' confidence in this area had noticeably declined with 41 per cent believing they were ‘top 20 per cent' sharply down from 55 per cent in 2015, with their own ratings in the lowest category doubling to 18 per cent.
"I am often asked what an Advice Practice looks like," Bloxham said. "It should have a minimum of 40 per cent revenue generated from advice services, and 60 per cent to 80 per cent of those advice services should be delivered by professional staff, not partners."
The research found that 81 per cent of accountants lacked the confidence in their own abilities to deliver advice services — down from 91 per cent last year, with Bloxham suggesting this improvement was mainly due to accountants realising that to grow their practice they needed to invest in developing advice services skillsets.
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