Accountants who embrace change will flourish
The accountant must embrace a one-stop shop approach and be able to offer their clients several financial services if they are to remain in the game.
Remember Kodak? That’s right, that very successful American company that had been around since 1888 that thought they sold film. Well, they did sell film, and lots of it but that’s not what they really did. They sold memories and how to capture a moment. Commonly referred to as a Kodak moment. They owned their space but didn’t even recognise it. As soon as there was a better way to do the same thing, film became redundant and so did the company. Kodak simply failed to understand what they really did and take advantage of change.
What do accountants really do? Clients perceive them as the trusted adviser on all things financial. If we look back over the past few decades, accountants did the lot.
Starting a company? Talk to an accountant.
Need financial advice? Talk to an accountant.
Need a loan? Talk to your accountant.
What do accountants do? They work tirelessly behind the scenes to help their clients. They are overworked and under bill for their services.
So, as the financial services industry has grown over the past decades, gradually specialist areas developed that stole the accountants' space. Finance brokers, investment advisers, bankers, financial planners and superannuation experts all joined the bandwagon of financial services. Sadly, in 2017 legislation was put in place that prohibits unqualified accountants from giving investment advice. The very thing they always did is now gone.
Unlike many other industries, the mainstream accounting industry has had little disruption. It just happened that other services grew around it and – unlike the big global accounting firms who have flourished by providing new and additional services like recruiting, consulting and business services just to name a few – the small suburban accounting firm has changed very little.
Why? Because your local accounting firm has very little time. Most accountants are working 50 hours a week just to keep up with client needs, so they don’t have the time to work on their businesses. Baby Boomer accountants now wake to a completely different environment than when they first started their business over 25 years ago. They are surrounded with new technology to make their accounting life easier. Practice tools, budgeting tools, client engagement software and all in the cloud. They just don’t have the time to cope with it. Don’t forget all this demand and change is being client driven. If clients don’t want it then it won’t happen
Now Baby Boomer accountants who should be transitioning into retirement and selling their businesses to the next generation are finding the businesses are less competitive. Their clients are gradually leaving to a more suitable environment and their businesses are losing value. It’s a slow decline.
It doesn’t have to be this way.
How do these accountants get their mojo back and thrive in this new environment? Well they can’t do it alone. They must become what their clients have always thought they were. There are many aspects now to being the trusted source of all things financial. To survive now, the accountant must embrace a one-stop shop approach and be able to offer their clients several financial services if they are to remain in the game.
OK, well that’s obvious, you may say. What’s stopping the accountant from transitioning to a full-service practice?
What stopped Kodak? The know-how? The will? The time? Identifying who can help? Or maybe they just don’t see it coming.
Well, change is now coming to the financial services industry. There are more rules, more legislation, more compliance and even more education required.
Baby Boomer accountants are now in a position not just to survive but to thrive in this new environment. They just have to reach out and get help with the solution.
It's time to embrace this change and become what their clients have always wanted.
Venn Williams, founder and director, BlueKite Capital