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Is probate the future of advisory?

22nd Jul 2019
Editor AccountingWEB
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Man Signing Last Will & Testament

Probate sits nicely alongside services such as inheritance tax and trusts, but some general practices looking to diversify may struggle to break the solicitors’ hold over the service.

In this post-MTD world, more firms are looking to diversify in order to recoup potential lost income, leaving a number to consider whether probate is the future.

As accountants know too well, nothing is certain but death and taxes. And both of these provide a good excuse for client conversations.

Since the ICAEW became the first non-legal probate regulator five years ago, accounting firms have tentatively dipped their toes into legal services.

But despite Kylie Fieldhouse dedicating a chunk of her Accountex seminar this year on the subject, the founder of KFH Accounting is still reluctant to nudge accountants in this direction. She warns practices interested in pursuing probate to not go into this complicated area half-heartedly.

“Tax is hard enough topic to talk about, but then you're talking about death and how an estate gets divided up and how families can fall out over this and how you can help prevent that. You have to do the proper research,” she told AccountingWEB's No Accounting for Taste podcast (episode below).

Tough breaking solicitors' dominance

Perhaps, for this reason, probate remains unchartered territory for many AccountingWEB readers. Many admitted in a recent Any Answers post to have dabbled in this area as a one-off for family members, but those that have pursued this avenue have locked horns with the perception that clients would just use solicitors.

AccountingWEB reader Toolmaker found the probate experience “challenging” and stated that although the fees generated are attractive enough to persevere, finding the work is difficult.

Right for you? Know your client base

The stranglehold solicitors have over this service is why Fieldhouse emphasises the importance of knowing your client base. “Traditionally people will go to a family solicitor first, they won't go to an accountant,” she said.

“My client base is made up of individuals and families and they're already having that lovely relationship with me where they're comfortable talking about tax. It's a natural progression to say: ‘We've saved money on tax and whilst we are on this topic, have you got a will in place?’

The amount of work and complexity does pay off. Offering probate services has resulted in Fieldhouse seeing an increase in referrals. Not only is probate attractive for her client base who already refer her for tax, but probate also opens up another stream of referrals from her clients' family members.

Don't go in without a business plan

June’s Accounting Excellence Talks panel (listen below) also banged the due diligence drum rather than encouraging probate-curious general practice firms into jumping in with both feet.

Nadia Hossein Mamode from Bee Accountancy encouraged firms mulling over this decision into having a business plan, as you would for any new niche or service. That’s not to say the business plan locks you into the decision, she says. It’s just a plan.

“Having a business plan is a way of evaluating whether this is a good strategy for you. It could be that it's not worth it, but you've then only spent the time and resource needed to produce the business plan and it doesn't go any further than that.”

Advisory is not for everyone

Fieldhouse believes the noise around advisory in the profession could be wrongly pushing unprepared firms into considering probate. As someone coming from a commercial background working as a finance business partner before starting her practice, Fieldhouse felt well-equipped to offer advisory services.

“Practices who are doing it are those who have personal financial arms up and running already. I liked the idea of going into personal tax further because it works with my client base and that's what it should come back to,” she said.

Probate is also expensive for a small practice owner in terms of the amount of paperwork it generates. “I am not looking at getting tons of clients. I'm looking at getting four-to-five cases a year maximum because there is a lot involved and it can be quite lengthy,” explained Fieldhouse.

The right fit for accountancy

As advisory and interpersonal skills become essential for the modern-day accountant, sensitive probate conversations seem like a natural fit for the profession.

Fieldhouse has a home-based office with a peaceful garden that provides a comfortable environment to handle a delicate conversation around death. It’s here that care-giving accountants can add value over solicitors.

“In a time when they really could have done with a nice cup of tea and a nurturing, homely environment, a lot of my clients who went through the process with solicitors really hated how sterile it felt,” said Fieldhouse. “So it made sense for us to do it. It was another way I could add value.”

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By Lawskills
24th Jul 2019 09:36

I have long thought that probate was a work type that should be the subject of collaboration not competition. Accountancy skills being very relevant to the preparation of estate accounts and tax returns; whilst legal skills are key to the interpretation and drafting of Wills and ancillary documents; conveying any property in the estate and the setting up and alteration of any trusts. The bit in the middle, is the strictly administrative work of identifying, valuing and collecting in the assets and meeting the liabilities. Either professional would be well equipped to do either. The experience of solicitors is long standing and new technologies are coming into to help speed this aspect up. A key development in recent years is the number of estates where conflict arises between beneficiaries and as this is litigation accountants are not regulated to work in contentious matters so solicitors and barristers usually handle this.
The reason STEP was formed was the recognition that in the private client arena there is more to be gained from working together than in competition. Long may that continue.

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