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Hope in Financial Planning By David Smith on Oct 3, 2019

People at table

Over the course of the past year or so I have written and spoken many times about the wonderful opportunity for the accounting profession to take the leading role to provide financial planning services to the community. With the exit of most of the big institutions, the accounting profession, which enjoys high community trust, is ideally placed to become the provider of choice.

However, the financial planning industry itself has a big problem. Cost of advice, driven by a highly regulated compliance regime, has made advice unaffordable for many people. Advice documents are complex and difficult to read. Wholesale investors are being subjected to the same sort of compliance regime as retail investors. Accountants have a minefield of traps to navigate when they’re trying to discuss issues with their clients. A simple question can turn into a need for a Statement of Advice costing thousands of dollars.

Credit should go to BGL Founder, Ron Lesh, for raising the debate and calling for the reinstatement of something like the accountants’ exemption. While that may not be the appropriate solution in this new world, it has at least stimulated the debate. Finally, the accounting bodies have joined the discussion and have appropriately called for a wholesale review of the system.

I have long held the view that accountants are ideally placed to provide holistic strategic advice to their clients. They enjoy their client’s trust, have a strong understanding of their client’s overall financial situation and appreciate the tax consequences of decisions that are made. Most accountants would prefer not to make specific investment recommendations but almost all believe that it would be in the client’s best interest for accountants to be able to provide this holistic strategic advice without a burdensome and expensive regulatory framework.

It must be remembered how we got here. Most of the problems have come from conflicted recommendations and remuneration. The big institutions were an abject failure in managing these conflicts. Some smaller financial planners also didn’t manage these conflicts well.

If the system permitted accountants to be able to provide strategic holistic advice, where is the conflict in that?

SMSFs are of course at the heart of much of this discussion as many of accountants’ SME clients have a large amount of their retirement savings tied up in an SMSF. The problem here is that SMSFs are considered a product and therefore any recommendation to establish an SMSF needs to be compared to other choices like industry funds, retail funds etc. Insurance needs also need to be considered. It is difficult to argue against that, however, once established, it seems reasonable that an accountant should be able to make recommendations regarding contributions, establishing pensions and the like. With investment and insurance advice most clients need advice. That is a different domain to holistic strategic advice. Expertise is needed and, given the issues of the past, we need a strong regulatory regime. However, a large number of clients have traditionally been DIY investors, buying and selling shares themselves, usually via an online broker. Such investors have generally not understood how to achieve a degree of diversification that is in their best interests. These clients understand investing is hard, and recent surveys show these DIY investors are looking for expert assistance. How can an accountant help them to find that help so they are making better investment decisions? One option is to direct them to marketplace platforms like where the investor can compare leading asset managers before selecting one to assist them in managing their portfolio.

Many other clients need expert financial planning advice to curate an appropriate, diversified, portfolio and ensure appropriate insurance products are in force. How can an accountant help this process? The options here are:

  1. To create a relationship with a financial planner. Transferring trust can be hard. The client may not feel comfortable. There’s also the risk that the accountant loses control over the client relationship.
  2. Establish a financial planning business in the firm. This is only really appropriate for larger firms. The cost and time required to establish and manage a planning business is significant whether or not it is part of a dealer group or under their own AFSL.
  3. Move to a co-operative joint venture model such as those offered by Under this model, a branded financial planning business is created for the accounting firm but all the operations and planning services are provided by Crescere. All client meetings occur at the accounting firm with Crescere planners operating under the accounting firm planning brand working alongside the accounting firm partners as colleagues. This model enables the accounting firm to offer a branded planning solution. Under the current regulatory framework it also overcomes the concerns as to where the boundaries are in providing advice.

Let’s hope the regulators and government recognise the importance of accountants in the provision of advice to the Australian community. There needs to be an appreciation of the issues the current regulatory framework needs to address such as advice affordability, timeliness (it takes too long to provide advice) and the need for a system that provides clear and simple advice unburdened from legalese. It will be an interesting few months!

David Smith is a non-executive director of OpenInvest and Chairman of Crescere Partners. If you have any interest in exploring these opportunities for your firm contact him at [email protected].



  1. Bob on November 8, 2019 at 9:09 am

    So in a sense you are leasing financial planners ???

    • David Smith on November 8, 2019 at 4:02 pm

      You could say that – the planner is Crescere’s planner under Crescere’s AFSL. One planner can support 3 to 4 firms. When they’re working with a firm they do so under the firm’s branded financial planning arm. Crescere’s planner meets the clients from the accountant’s office and works alongside the accountant in providing the service. Hope that makes sense.

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