No 'one size fits all' advisory approach, says consultant

Speaking to Public Accountant, Smithink director David Smith noted the advisory opportunity that is opening up for accountants as a result of the major banks letting go of their financial advice arms, something largely driven by the ongoing banking royal commission.

Mr Smith said that every accounting firm is in a different place when it comes to their technical skills and resources, and that there is no one right approach to adopting advisory services.

“I don’t think there’s a ‘one size fits all’ here. Some firms might have accountants with real skills and the desire to be able to develop their financial planning service in house,” Mr Smith said.

“Other firms recognise that there's an opportunity to provide a better service to their clients but for one reason or another don't have the skills or the resources to be able to do that, in which case partnering might be the right answer.”

Mr Smith said that a critical skill that he’s been working with firms on is the ability to have broad-based conversations with their clients in uncovering their needs, noting it can be both business and personal financial affairs.

In creating broad-based conversations, he said firms should also not expect every conversation to be around financial planning.

“There may be issues that they might have marketing issues in their business. They might have HR issues. They might have IT issues. They might have all sorts of different things going on,” Mr Smith said.

“If they do have those holistic conversations with their clients, one of the things that's going to spin out of that will be a need for strong financial planning and insurance advice, because that's such a critical component in everybody's lives to get that piece right.”

Further, Mr Smith said financial planning is a different game in terms of communicating and engaging with a client.

“Accountants are very good at what they do and have very strong trusted relationships, great knowledge of the client's affairs, but in many cases they either lack the time and resources to develop financial planning services or don't really have the manner to be able to engage with clients in the way which is best when you're talking about the development of financial plans and the like,” he said.