Convergence of planning and accountancy unlikely

Planners and accountants are unlikely to take on each other’s work due to the high compliance and education workloads involved despite claims that accountants could work in the financial planning space. 

Paradigm Wealth Management managing director Patrick Nalty said it was highly unlikely that accountants and planners would be the one and the same but they would work side by side more often. 

“The accountancy industry associations are keen on being in the financial planning space and in theory that is okay. In practice it will be too hard due to all the responsibilities related to being a financial planner and providing financial planning advice,” Nalty said. 

“These include attaining an Australian financial services licence (AFSL) and agreeing to working under an external dispute resolution scheme.” 

He also stated that accountants would need to add the provision of Financial Services Guides, Statements of Advice and application of the 'know your client’ rules before providing advice while working under their existing compliance regimes. 

Conversely financial planners would not have the infrastructure to operate under the Tax Agents Services Act (TASA) and “should outsource this work to accountants while being aware of what tax rules they still need to comply with”. 

Nalty said that planners and accountants need to decide how far they will progress into the work carried out by the other before they cross the line, and would be better served calling in experts in their respective fields. 

According to Nalty the implementation of the Future of Financial Advice (FOFA) and TASA was changing the advisory landscape and those who wished to work in between both would likely end up as 'generalist’ advisers. 

“Generalist advisers, those who dabble in both taxation and financial planning, will not do well in the future and will end up at the likes of the Financial Ombudsman Service or with increased professional indemnity insurance,” Nalty said. 

“These advisers will not do well because they are not working at their core competencies and there is no place to masquerade in the corporations’ law.” 

Accountants would best serve themselves and financial planners by staying independent, with each profession keeping each other “on their toes on the areas of advice that are not their speciality”, Nalty said. 

Nalty’s comments follow those he made at a conference in Melbourne last week where he discouraged accountants from seeking an Australian financial services licence (AFSL) through an institutionally owned licensee.