We’ve all heard about the rise in demand for financial advice over the last 12 months. With about 500,000 small employers due to stage for auto-enrolment in 2016, this was expected. But rather than turning to financial advisors, business owners and individuals are turning to their accountants for advice.
According to research from Bower Private Clients, of the 105 accountants surveyed, 36% experienced an increase in demand from clients in the last 12 months.
The most popular financial advice areas:
This demand is causing concern among accountants with 31% saying that they are worried that some of the advice they provide exceeds their professional expertise, and 6% stating that they have gone ahead and provided financial advice themselves.
From what we can see, a combination of technological advances, regulatory changes, and consumer demand is driving a coming together of accountancy and financial advice. The time-wary consumer is looking for a one-stop financial advice shop.
According to the same study mentioned above, 45% of accountants said they expect their work with IFAs to increase over the next 24 months. ICAEW concurs. In last year’s at-retirement reforms, they suggested ‘expertise sharing’ between accountants and advisers, as both need to learn more about the peers’ specialisms to properly assist their clients.
We also think this is the way to go as it opens up a raft of opportunities for accountants, especially when it comes to auto-enrolment. While advising on which pensions to buy can continue to be the domain of IFA’s, it is up to accountants, as trusted providers, to help their clients comply.
In fact, Bradbury Hamilton, an IFA firm, is already getting a lot of business through a joint venture with Essex-based accountancy firm, Raffingers.
If you want to explore potential partnerships and growth opportunities for your practice, do some homework, talk to your network, and reach out to local IFAs to determine the kind of mutually beneficial service you can provide. Establishing strategic partnerships is key to transitioning to a finance advice model and to continued practice success.
A great way to add value to your clients and generate a new revenue stream for your accountancy practice is to offer your clients 'auto-enrolment' services. Before we discuss how you can do this let’s first understand what auto-enrolment is.
What is auto-enrolment?
First introduced in 2012, auto-enrolment is the latest buzz word in pensions. It is a law which ensures the UK workforce saves for their retirement. As per the rules, all employers are supposed to enrol eligible workers into a pension scheme. By eligible we mean:
What qualifies accountants to offer auto-enrolment?
As per The Pensions Regular (TPR), over 500,000 small and micro businesses are due to stage in 2016, and most are, as suspected, turning to their main professional contact i.e. their accountant, for help. And if they are turning to you, we feel you should seize this opportunity. We understand that you cannot provide advice on which pension provider to choose, but you can definitely look after the administrative and processing aspects of it. There is money to be made here and it is also an added value service for your clients.
You must be wondering why accountants need to look at new service offerings like this.
The answer to this is simple. We feel that offering a service like auto-enrolment will help your practice grow as it creates new opportunities to market your professional services. As per our experience, an accountancy practice can, on an average, charge £1000 per year in fees per payroll client if they implement the right processes. And if you really want to increase your practice’s revenues, we are certain you could easily find 10 clients who need payroll. Quite frankly, with the opportunity auto-enrolment brings, new business is firmly being placed in the laps of accountancy practices.
Not forgetting, with the advent of the cloud, traditional compliance work is facing a downward curve. So unless you want your profits to get hammered, you must find new and more valuable ways to work with your clients.
But auto-enrolment administration and processing is time-consuming
Indeed, there is more to auto-enrolment then just eligibility and staging dates. Your clients would expect their accountant to assess their employees, calculate appropriate contribution levels, guide them with record keeping, and communicate with the workforce among other things.
Do you want to know how to make this profitable?
For accountants the need to simplify auto-enrolment is essential. One easy solution is to outsource the administrative and processing tasks of the payroll to an ICAEW and ACCA member company like QXAS. Our Xero certified operations director, Dishant Desai has a broad experience in using a number of payroll products.
Our service will take the paper-work off your plate, plus the responsibility. Of course, just like accountants, we can’t provide advice on which pension provider to choose, but we can set up your clients’ employees with their chosen pension provider and manage the ongoing pension deductions. We can also look at:
Big benefits of outsourcing auto-enrolment
We hope that this article gave you some good ideas about opening a new profitable revenue stream for your accountancy practice. If it’s helps please like and share this article. Your thoughts are welcome in the comment section too.
To arrange a free no-obligation discussion, please call 0870 803 1033 or email firstname.lastname@example.org
My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.