Accountants cautious on financial planning alignments
The independence of accountants who align their businesses with financial planning dealer groups could be called into question, according to RSM Bird Cameron principal Peter Nicol.
With no word from the Minister for Financial Services, Bill Shorten, on an alternative to the accountants' exemption which will be removed when the Future of Financial Advice (FOFA) changes are implemented, many accounting firms are reviewing the options that allow them to advise on SMSFs.
According to Nicol, aligning with a dealer group had been a possibility, but RSM Bird Cameron would be obtaining its own Australian financial services licence due to an apparent conflict of interest.
"The accountant may feel a bit conflicted because they are supposed to be the trusted adviser and independent, but if you've only got a limited licence or product range to advise on, what do you say?" he said.
Nicol acknowledged, however, that small accounting firms might still find it appealing to partner with dealer groups due to a lack of funds, the time spent on licensing procedures or the extra resources dealer groups could offer.
Institute of Public Accountants executive general manager Vicki Stylianou believes the apparent conflict is a misconception.
She said independence in SMSF advice would be maintained through the ban on commissions and, in their case, rigorous screening of their approved product list and members' adherence to a code of ethics.
"I know there's a lot of misconceptions or a lot of misinformation from people thinking that if you align with a particular group or a particular provider, then you have to sell their product," Stylianou said.
"If it's not in [the client's] best interest to recommend a particular product or a particular asset class, then you don't by law."
BT Financial Group's head of dealer groups Matthew Englund said that its subsidiary Securitor's accountants' 'offer' was about moving towards a holistic business model.
It was also developed as a response to their current clients' wants and needs.
"We're making sure that the accountants' side of our practitioners today, our practice owners today and those in the future…are able to continue to do the thing that they want to do, which is to protect the interest of their clients and give those clients strategic advice," Englund said.
Recommended for you
Wealth managers have said they are experiencing difficulties in aligning their company’s in-house views with the ever-increasing needs of clients, according to MSCI.
The financial advice industry is experiencing a “champagne problem” regarding pricing, with advice firms seeing no need to cut their prices to remain competitive.
Marking a decade offering managed accounts in Australia, BlackRock has elaborated on the changes it has seen in their usage by financial advisers, with net client flows rising from 4 per cent to 25 per cent.
AZ NGA’s CEO has unpacked how its recent $345 million debt facility from Barings will accelerate its advice network’s growth ambitions, and allow its largest firms to access a greater source of funding.
