One survey found 69 per cent of SME owners and managers considered their accountant more trustworthy than their financial adviser and business partner.

F inancial planners and accountants have long held a volatile relationship. In some cases, theyve been natural allies. In others, outright enemies.

A survey in April of more than 1000 Australian owners of small-to-medium enterprises, commissioned by accounting software provider CCH, found that 69 per cent of SME owners trusted their accountants advice well above that of their financial planner, business partner or lawyer .

Whatever the case, in a world where more than 12 million Australians with superannuation will at some stage seek financial advice, both professional advisers have a role to play.

Accountants and financial planners have already been teaming up to provide better advice. Financial Planning Association chief executive Mark Rantall says of the bodys 14,000 members across Australia, roughly 25 per cent are accountants.

There will always be some crossover, but how frequently and willingly the two professions share clients in coming years is less certain.

Less incentive to share the revenue pie?

On average, a senior professional accountant providing self-managed superannuation fund (SMSF) advice would generate about $80,000 a year just from that stream of advice, says the Institute of Chartered Accountants general manager of leadership and quality, Yasser El-Ansary.

Its hard to measure by how much, but El-Ansary says there is no doubt the fees generated by accountants on superannuation-related advice has increased as more Australians have sought such advice.

As accountants increase their training and boost qualifications to give consumers better financial advice, they may be less willing to share the superannuation revenue pie.

From July, accountants holding a public practice certificate from one of the three professional accounting bodies CPA Australia, the Institute of Chartered Accountants in Australia and the Institute of Public Accountants have been able to obtain what is called a limited licence.

While this costs less and is less onerous to obtain than a full licence, it sets limitations. Accountants cant give product-specific advice. To do that, the accountants will have to refer the client to a licensed financial planner or get a full licence themselves (and after July 1, 2016, accountants wanting a full licence will be required to satisfy the same experience requirements as everyone else).

Even so, the limited licence gives greater scope to advise on broader matters such as basic deposit products, general and life insurance, securities and simple managed investment schemes. It is estimated that about 10,000 accountants will get a limited rather than full licence over the coming months.

The overall pool of advisers under the AFSL framework will increase by a significant margin, says El-Ansary.

Paul Drum, CPA Australias head of policy, says the licence will give accountants a chance to upskill and broaden their professional knowledge. By learning how to give broad-reaching financial advice, it will give them new opportunities that they havent had in the past, he says.

Accountants and planners can and should work together to build a better value proposition for their clients, says Mark Rantall, chief executive of the Financial Planning Association.Photo: Michel OSullivan

Why financial planners and accountants went to war

At the same time as accountants are increasing their skills, the way financial planners give tax advice is changing.

The Tax Agent Services Regime, which came into effect in March 2010, is aimed at boosting consumer protection measures and improving the quality of tax advice provided to the public. It will eventually require financial planners to comply with more stringent training and ethical requirements.

A decision on whether to include financial planners in the scope of the regime was put on hold earlier this year following a bitter fight between the financial planning and accounting lobbies. In June, the federal government caved in to the financial planning lobby, granting a 12-month extension for financial planners to be brought into the regime.

Rantall says the extension was a win both for common sense and due process. He says while financial planners are not against improving their skills, the bill put forward to Parliament had many outstanding unresolved issues and was missing detail. He says the 12-month extension will give the financial planning profession time to prepare.

But the accountants are not happy with the delay. In the days leading up to the government decision, the accounting bodies voiced public concerns that financial planners would not be brought into the regime soon enough.

Financial planners have been able to provide tax advice without ensuring the same competency levels required by qualified tax agents, says Institute of Public Accountants chief executive officer Andrew Conway.

Anyone providing tax advice should do so to the same professional and ethical standards required under the act.

CPA Australia and the Institute of Chartered Accountants, which between them have about 200,000 practising members, had also issued a joint statement warning that Australians access to high-quality professional tax advice faces uncertainty.

CPA Australias Drum says the new regulatory framework, which was supposed to start on July 1, has been in development for over three years and that stakeholders had been given sufficient time to transition. Ultimately, he welcomed the fact that it was passed.

El-Ansary says while the 12-month delay to the start date of the scheme was disappointing, the legislation eventually passed. This legislation protects the public interest, and thats the bottom line, he says.

Just as its unclear whether the new financial advice requirements for bean counters will see more accountants and financial planners working together, its unclear whether the new regime will have the same impact.

It brings a degree of symmetry into the regulatory framework. . . so it could have the effect of bringing more financial planning and accounting firms together, El-Ansary says. We will have to wait and see how it unfolds over the next few years.

Will trusted advisers

win out?

The one factor that could see accountants moving into the traditional domain of financial planners is that most Australians using an accountant see them as their trusted adviser.

The provision of financial advice is going to become a very significant part of the delivery of professional services to households right across the country, El-Ansary says. The simple fact is that all households are engaged in superannuation. They have compulsory savings attached to that so have to make informed decisions about their future and their financial security on a day-to-day basis.

He says accountants have always been the source of trusted advice for the community. Over 70 per cent of Australians visit a professional accountant every year to manage their tax obligations, so accountants are the right place for households to seek out that independent advice, he says.

But Rantall says there will always be a need for tailored financial advice and tailored tax advice. Financial planning is a discrete profession, he says. Increasingly, people have to specialise in an area because the volume of knowledge you need to advise appropriately is enormous.

Its all well for one industry to say they want to control everything in their sphere of influence. The reality is consumers get the right advice for their circumstances. . . An accountant who has no training in investments is not qualified to give the advice of a financial planner, and a financial planner who doesnt have qualifications in tax advice isnt right to give tax advice.

Rantall says that wont necessarily result in financial planners and accountants fighting against each other. It could lead to more link-ups whether through an informal referral or direct buyouts of firms.

Rantall says hes seen larger financial planning firms buying out smaller accounting firms to create a one-stop shop for advice.

That trend has been happening for some time, and I can see that accelerating as time goes on, he says. The two groups can and should work together to build a better value proposition for their clients.