Wealth management is a big part of many accountants’ practices in Australia – in some cases, the financial planning portfolios of their businesses are worth much more than the accounting clients.

Now it has been suggested that New Zealand accountants should follow suit as new software such as Xero reduces the need for the traditional bookkeeping aspects of accounting.

Ben Brinkerhoff, of NZ Wealth, said his organisation had noticed that clients that offered accounting as well as financial planning had successful wealth management divisions. “Accountants have to have 100% ownership and control [of their clients]. They think about clients differently.”

Brinkerhoff said the key was for them to completely outsource the aspects of financial planning they were not good at, such as the research and compliance. "They’re good at planning so if you take away all the stuff they don’t want to do, and let them keep the ownership and control, and work with the partners to get them onside and to build trust, it almost can’t not be successful.”

Matthew Bellingham, director at Bellingham Wallace and chair of the NZICA public practice advisory board, said fund managers and wealth advisers had been trying to target accountants’ client bases as long as he had been in business. “There hasn’t been a huge uptake from the NZICA membership yet.”

But he said the Australian experience had shown accountants were keen to get involved with financial planning.

“But I think at the moment there needs to be a lot of work done around it. Our firm is a bit hesitant to make the jump, we’ve got the Financial Advisers Act in play now so you’ve got to do another set of qualifications and there’s a strict code of ethics. The other thing that puts us off is what if the investment doesn’t perform well?  A lot of members are in an advisory role and are called in to have a look at performance of fund managers, there’s no way we can be independent if we’re doing everything.”

Brinkerhoff said there was strong client demand for financial planning advice from their accountants.

“People looking for an adviser were asked how likely they would be to go with their accounting firm if they offered wealth management and the answer was the over 50% were very likely.”

FMA spokesman Andrew Park said there was an exemption in the FAA for chartered accountants providing a financial service in the ordinary course of business.
“It’s important to point out the prohibition in the Financial Advisers Act, section 20B, making it an offence for anyone except an AFA to hold themselves out (directly or indirectly) as a financial planner or offering to provide a financial or investment planning service.”