Share this content

Wealth management: A natural for accountants

11th May 2011
Share this content

Gordon Gilchrist argues that accountants are wrong to shy away from providing financial advice when clients are crying out for it.

Since 2008 the world of financial services has been pulled through the mire; it’s been one horror story of mis-selling after another. It’s understandable that accountants look to that profession and decide that they don’t want to have anything to do with it.

But what if they had picked up the gauntlet 20 years ago? The excesses we have witnessed probably would never have happened. Accountants aren’t tarnished by the taint of commission. They get paid by hour and don’t differentiate between the value of tax planning advice that saves £10,000 or £1m - clients still get the same bill.

The word of financial services is different - they get a percentage of the value increase. It’s a different mindset.

The holistic view
The link with tax planning and exit route planning is so strong that one could argue that financial services should be a natural domain of the accounting profession. The accountant is blessed with a very holistic view: they have all the relevant information from company accounts, tax returns and client interviews. Their input into overall wealth management and asset protection is so much more important than any other professional adviser. An IFA has to ask for all the documentation that the accountant already has - which is why the accountant should have been providing that advice in the first place.

Tax advisers are already engaged in short term financial to protect clients from higher tax rates - they’re the only player in town who can do that.

But there’s a longer term role that’s covered by phrases such as wealth management or asset protection - helping to protect clients against future liabilities or financial pitfalls.

Accountants can do these things. The problem is clients don’t know it. Accountants haven’t done it because they don’t want to be seen to oversell. I prefer to think of it as giving customers something they want. If you can do that, they will pay much more than for supplying something demanded from them by regulations.

More than one way to do it
It’s true that financial services are heavily regulated, and many firms prefer to stick to compliance work such as accounts, audit and tax return, where there’s less scope for using professional judgement.
The account serving a small client base from Inverurie might struggle to afford a specialist tax partner, let alone a financial adviser. If you can’t afford the cost of setting up your own IFA operation, the answer is a joint venture. This was the rationale for 2020 Group’s relationship with Positive Solutions. Positive is a 1,700-strong network of advisers, with a specialist professional partnership group trained to work with accountants. For many of the firms who have got involved, it’s the best thing they ever did; they found their vocations.

If the accountant doesn’t provide these services then someone else will and they risk losing the client. We all know that the more services you buy from an accountant, the less likely you’ll leave.

With the right people on board, firms earning perhaps £1m in fees have grown their revenues 30-40%. With these results, one can reasonably assume that it is a service customers are willing to entertain.

Jonathan Morley, business development director of Positive Solutions feels the same way. He recently commented: “From the IFAs point of view, the accountants have provided the trust and integrity which the Financial Services arena has struggled with over the past decade or two. As a result, the increase in revenue through joint venturing with accountants has been outstanding and long may this continue.”

Gordon Gilchrist is marketing director of The 2020 Group. A regular lecturer, he is also the co-author of the Croner.CCH book, 'SME Consulting'.

Replies (5)

Please login or register to join the discussion.

By ferengi
13th May 2011 13:26

Not tainted...?

You start, rightly, by pointing out that Accountants are 'not tainted' by commission and charge by the hour... whether gaining the client £10,000 or £1m.  This is exactly the point as to why you're so right in what you say in this article.  Clients would love this type of service and, you're right, would actually be happy to pay the bill for this expertise from someone that they normally only pay for compliance but is likely a trusted (and liked) advisor.

But you then go onto say that accountants should partner with a local IFA firm.  No no no... that destroys the whole point you are trying to make here and just mires the untainted accountant back in the stinky stuff that they'd be trying to avoid.

Even the idea of hiring a financial advisor spoils the big advantage here:  that the client trusts the accountant personally and would want his advice... not his colleague, the new financial advisor you've hired... a call from whom will be about as welcome to the client as those calls they get from the bank asking if they need some investment advice or a pension just because they've made a branch deposit of more than about a hundred quid!!

Thanks (0)
By zarathustra
16th May 2011 11:38


I used to think that financial services were some kind of panacea, mostly after going on courses by people like (and including!) Gordon. However, after trying a number of different business models, over quite a few years, we have failed to generate more than about 1% of additional revenues. Negative feedback has been in the form of clients arranging their own single pension payment after the first year to avoid paying any commission (after first ringing me and asking how much to put in!!). Clients express an interest in things like protection, but then dont buy. We were doing a fair few mortgages, but even that has dried up now.

About the most positive thing to come out of it is the referrals we have received from IFAs.


Thanks (0)
By AnnaKournikovasKnickers
16th May 2011 20:30

IFA's a Wealth Management

 Every so often, like Paul’s revelation on the road to Damascus this old favourite makes the rounds. The business model will not work.  Wealth management where the accountant’s input can make a difference is not where it’s at any more. The RDR (Retail Distribution Revue) will ban commissions on investment and pension sales and fee-sharing between IFA’s and accountant’s, and the latter’s requirement for transparency to their clients will be impractical.


Commissions on life and other ‘protection’ insurance (which has always been where the big money) is will remain. But the accountant’s involvement (other than the credibility given to the IFA salesperson by the referral) is irrelevant here.


If you do venture down this path, you should know that IFA networks like Positive Solutions are largely comprised of salespersons who are refugees from the large insurance company direct sales forces that were closed down in the 1990’s. And you may be introducing an ex ‘Man from the Pru’ to your client.


Better off chumming up with an established local directly authorised IFA with whom some of your clients have already dealt. Or training your own up. Better to graft financial services skills on to a young accountant than trying to get an insurance man to fit in to the ethos of accountants.

Thanks (0)
By geoffmw
17th May 2011 17:13

Before 1988

when Life and pensions work became regulated I was able to get quotes from the top half dozen or so insurance companies (not Equitable Life) which has in the main turned out well for those clients who may otherwise not have made pension contributions.


When feepaying comes back in as compulsory this work will come back to those accountantrs who ccan tie up with a decent IFA who can afford to invest in the proper internet tools and still share the fees (with the clients' knowledge that this is happening.

Even meanwhile I have been careful only to recommend 1 or 2 trusted IFA's and obtain introductory commission.

Thanks (0)
By Paul Scholes
24th May 2011 13:02

While I'm at it I'll sell their house for them as well

I too remember pre 1988 when I'd be shoved out to the client by the partner to collect their tax stuff and give them investment advice, I shudder to think what I said and so it was a blessing when someone realised we needed a separate fully trained and regulated FS industry.

Well that was the hope but, of course, as we all know, greed & repackaging of basic goods as something new or different has generated bigger problems than just picking the wrong building society.

I also have to say that I get enough excitement? from being an accountant and, like property development, estate agency, insolvency work and betting on the horses, the world of financial services leaves me cold.  I would also dispute that our judgment abilities are lacking without FS work, I use mine every day in areas I enjoy and in which I can provide value and the picture painted by Gordon of a non-FS practice as a compliance machine is an insult.  I would also question his assumption that we all charge by the hour and don't recognise the value to the client of a piece of advice that could make them or save then £1M.

Any advisor worth his or her salt should have a reasonable grasp of the basics of sound financial management but these days I tend to rely on advice from my wealthy clients over detailed stuff, they know far more than most IFAs I come across.

I'm sure GG didn't intent to raise hackles but the article appears "cheap" and unrepresentative of life without FS.



Thanks (0)