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Time to rethink your financial planning strategy? By David Smith from Smithink on Nov 9, 2015

Time to rethink your financial planning strategy

Few are happy about the changes that are coming on 1 July next year. It certainly adds to the compliance burden and has the danger of making advice unaffordable or unprofitable.

But what the changes are doing is making all firms consider their position with financial planning. My hope is that firms will take a wider view than just thinking about how they will comply with the new licensing regime.

Most firms are thinking about how they can broaden their service offering beyond the traditional tax and accounting compliance. The drivers are well known – cloud accounting, data feeds, tax office automation, standard business reporting and perhaps tax simplification (a big perhaps). For many the impact on compliance has been slight. Perhaps a bit more price pressure…but the signs are there.

So the proactive firms have initiatives underway to broaden their service offering. Business advisory services is one area of focus. We have seen the explosion of software solutions to assist accountants in the provision of these services. Financial planning should be a second area of focus.

To be a true holistic adviser you need to be able to deeply engage with your client in relation to their business and personal financial affairs. We have long believed that accountants need to develop the skills to effectively “Needs Review” clients by asking the right questions to unlock the issues of concern in their business and personal lives. Our “10 by 10 needs review” document (click here to obtain a copy) is intended to assist accountants conduct effective discussions with their clients.

Financial planning is a key element but is harder due to the onerous compliance regime and the negative stigma that the industry has suffered from high profile examples of poor advice. Yet, to be a true holistic adviser, accountants need to ensure that financial planning advice is part of their offering.

So as firms are reviewing their plans to comply with the new licensing regime on 1 July they should take the opportunity to consider more broadly their approach to financial planning. The outcome that they should be seeking is a solution that enables them to confidently and competently deliver financial planning advice. There are a whole range of options from operating your own financial planning business under your own or someone else’s license to establishing joint ventures like those offered by to simple referral arrangements. All options should be explored. Licensing for Accountants ( is an independent service to help firms determine their appropriate strategy and develop a plan for their firm. Engaging them could help you develop your plan.

You need to think through how you will engage and provide services to clients. The financial planning compliance regime does complicate it and add to cost and this must be considered during any review. No two offerings are the same. Some licensees are developing streamlined SoAs and compliance processes to help but questions will remain. If you are not personally licensed will this mean that you’ll need a licensed person in most of your client meetings as conversations move to retirement planning and SMSFs. A good adviser will not want to put limits on where a client conversation might lead. Consider what a client wants. Surely they will want an open and wide ranging discussion with their financial adviser about all their business and personal issues, finances and plans. Ensuring that you’re properly positioned to provide this advice is a critical component to being your client’s holistic adviser.

My hope is that firms will use the 1 July 2016 changes as a catalyst for them to review their approach to financial planning more generally. Take a step back. Think more broadly about what a client wants, then think how you can best fill those needs. Consider your partnering options and take advice in developing your strategy.

To help you along the way – register for our live 4-hour licensing webcast on November 25 where we, along with Licensing for Accountants will provide independent advice from a range of speakers and interview a number of firms who have already completed the journey. Click here to register or to find out more. 

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