Accountants to give advice through Magnify

AMPandPricewaterhouseCoopers(PwC) today launched Magnify Financial Planners, a new dealer group catering to the specific needs of chartered accountants considering expanding their service offerings to encompass financial planning.

The shifting regulatory environment under the Financial Services Reform Act (FSRA), and particularly recent debate over the level of advice accountants should offer, has created the impetus for the launch of the group, according to Magnify general manager and chartered accountant Ray Djani.

“Magnify provides a timely solution for chartered accountants concerned about the effects of the FSRA, which may have an impact on their ability to offer detailed financial advice to their clients,” says Djani, who is a former director of PwC and most recently national development manager withArrive Wealth Management.

Djani also highlights the reputation of the chartered accountant as “the trusted adviser” in creating a market opportunity for the group - rather than referring clients to external advisers, Magnify will enable accountants to take advantage of their existing client relationships to provide extra services and grow revenue streams and practice value.

As Djani says many practices want to provide advice but are struggling with how to go about it, Magnify Financial Planners will offer a ‘business in a box’ model.

Accounting practices will initially receive an upfront consultation to highlight financial planning opportunities, advice on how to move the practice into this area and how to structure the business, and assistance with the recruitment of an appropriate financial planner.

Magnify practices will also be able to access ongoing support in the areas of training, compliance and professional development, marketing and business development, administration and back-office, independent portfolio construction, product lists and research, and importantly, professional indemnity insurance (subject to applicant approval).

“It is a low risk entry option, which allows accountants to move to a more diversified business model, and offer more services with some assistance. But the owners of the practice continue to control the destiny of the practice, which is totally the reverse of some of the consolidator models we’ve seen in the market,” Djani says.

To provide access to a broad range of financial and investment products, AMP will utilise its recently announced partnership with wrap administrator Asgard to create a wrap account service specifically for Magnify, to be called Carta eWrap.

“Chartered accountants are very focused on providing objective advice, so Mercer Investment Consulting will be putting together and maintaining the recommended list and portfolio construction,” Djani says.

PwC will have a minority 19.9 per cent equity in the business with the balance of the equity owned by AMP.

According to Djani, PwC will bring value to the relationship in terms of understanding the culture of the chartered accounting world, their technical expertise, and the networks they have with former staff now running their own practices.