Accountants must automate advice or face potential annihilation

on 11 May 2016
Created: 11 May 2016

Holman also reiterated that accountants aren’t a threat to advisers because they are completely different skill sets.

The comments come soon after GPS announced an automated Statement of Advice (SoA) tool that slashes the time it takes accountants to produce a range of advice documents by around 80 per cent.

“To have a successful profitable business you’ve got to focus on business efficiency and making things turnkey,” he says.

GPS Wealth hired external coders to build the automated SoA, but project managed the process.

Holman (pictured) says that the skills and funds needed to develop and project manage technology automation highlight the benefits of advisers being part of larger organisations, such as dealer groups.

“Accountants [and advisers] probably wouldn’t have the time, skill or know-how to automate their processes themselves,” he says.

The SoA process, which is exclusively available to GPS Wealth’s authorised representatives, is computer automated and includes a range of checklists that help accountants meet their responsibilities under the new licensing regime.


Is it concessional or non-concessional?

The automated SoA comes ahead of the removal of the accountants’ exemption on July 1. Accountants who want to make a recommendation to clients to establish an SMSF will be required to make a Statement of Advice.

An input section includes questions on issues such as the client’s retirement goals, their current SMSF balance, whether they plan to borrow, and if a contribution is concessional or non-concessional. A strategy paper is automatically produced from the checklist information.

GPS Wealth’s automated SoA then produces compliant statements in five areas: establishing a self-managed superannuation fund (SMSF); borrowing to invest in real estate under a Limited Recourse Borrowing Arrangement (LBRA); implementing a transition to retirement strategy; concessional and non-concessional super contribution strategies and reserving strategies.

Holman says accountants can charge a fee for the strategy paper and a fee for the completion of the statement of advice, “then refer to a financial planner for a detailed investment strategy and insurance review for the SMSF members”.

Sub: Not possible to be both accountant and adviser

“More and more accounting firms are embracing the need to include financial services as part of their service offering,” Holman says.

But he says that it is impossible for an accountant to be both an accountant and financial adviser. “They are separate skill sets,” he says. “But if they’re working together it’s a powerful outcome for the client.”

The automated SoA also has inbuilt tools to help meet best practice. For example, ASIC has provided guidance that SMSFs should have minimum funds of $200,000 when established. GPS Wealth’s automated SoA won’t complete if funds are under $200,000. A representative will have to contact a member of the compliance team to explain the lower-than-desired balance. If they receive approval to proceed they will receive an authorisation code that allows them to complete the SoA.


Lifting practice efficiency

Holman says a complex SoA which may have previously taken five hours to prepare “can now be delivered in 30-45 minutes, which will significantly lift practice efficiency, lower costs and free accountants to spend more time in front of clients”.

“We’re committed to partnering with accountants as they adjust to the removal of the accountants’ exemption and navigate the new licensing regime, which is why we developed a tool to help them meet their obligations while increasing their productivity, profitability and growth potential,” he says. “Our focus continues to be working with professional accounting and advisory firms which specialise in SMSF advice by providing them with a turnkey licensing solution that includes coaching, mentoring and client engagement tools in addition to more traditional dealer services.”

The automated SoA will be available in the cloud within the next few months, and GPS is expected to continue to roll out additional automated tools for accountants and financial advisers.

“In the coming months we will be adding other calculators including rental property calculators and various lending calculators designed specifically for accountants,” Holman says. “It will all be hosted in the cloud, providing easy access for accountants.”


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