Article published in Independent Financial Advisor (IFA), in response to previous article on disgruntled CPA’s.

After nearly two years, CPA Australia fails to get traction despite receiving 600 expressions of interest from advisers and advice groups and investing $1.15million into its advice business.

What has led to the failure of the CPA Advice arm?

Or the real question, what differentiates a CPA Financial Adviser from any other Advice Dealer Groups?

The idea of a Financial Planner aligned with CPA Australia appears to offer clients a service that could simplify a client’s financial life.

The potential of synergy between forward-looking strategy accounted for by an Accountant when optimising the client’s tax returns, insurances and superannuation.  For business owners, Accountants could account for their personal strategies in the business & tax planning processes.

Personal Advice Game Changes?

CPA Australia Advice group call’s out the following as “Game Changers” in personal Financial Advice …

  • A focus on what’s right for the person seeking advice – not what’s financially beneficial for the adviser.
  • Independence of Advice; and
  • Community standing and trust in Accountants

We argue that the first point is the only one with substance. Whilst very important goals – independence of advice and trust are questionable as “Game Changers” that personal Financial Advice in Australia is needing.

Either way, is it sufficient benefit to an adviser considering joining the CPA Australia Adviser Group?

More importantly, is this sufficient benefit for a client to use a CPA Australia Adviser?

From a client perspective, there is a number of challenges that Accountants have.  It is to be noted there are a few exceptions, but by and large Accountants are business to business players are don’t get involved in a client’s personal financial life except the “business of their tax”;  it is messy.

This changes somewhat when clients are also business owners; with cash flow forecasting needed for financing; or where significant personal assets are tied up in businesses or self-managed superfunds.

Getting involved in personal financial strategy is a big bridge for some Accountants to build.  While not impossible, it is a hurdle nonetheless.

The second challenge for Accountants, we propose, is offering “fee for service advice model”.  It is arguable, that Accountants struggle with this concept even now.

How many Accountants sell advice only without product?

Their products are superannuation funds, tax returns, profit and loss statements, ASIC returns.  Some brave Accountants tackle Business Planning and Cash Flow forecasting, but these are hard pieces to sell outside of bank finance applications.  Why? because it falls more into Advice without product.

An argument for a real GAME CHANGE in Personal Finance Advice

Advisors (whether they are Accountants or Financial Planners) will continue to struggle to truly transition to personal strategy fee for service, independent of product advice, unless they get knee deep into a client’s personal financial life.

Advice focused on really solving the challenges that are holding their clients back from making real financial progress.

THE OPPORTUNITY

What if Financial Planners and Accountant Advisors:

  • Focused on advice that improved the everyday financial lives of ordinary Australians
  • Were actually strategic, instead of product focused – Drilling deep into what is stopping clients from getting ahead?
  • Utilised technology to track, manage and report on the cashflow outcomes created from this overall advice process
  • Didn’t shy away from the “pre-advice” challenges, but assisted clients to remove hurdles, like debt as a core component of their service
  • Provided their clients with outsourced management of budget and cashflows, to lift financial stress
  • Provided their clients with outsourced ongoing coaching and structure designed to manage spending, and support clients over the long term.

THE OUTCOMES

A service such as the above would truly offer differentiation from what is largely offered in the Advice market and would offer great opportunities to clients, advisers, CPA Australia and its partners.

It would:

  • Give an adviser far greater insight into the client’s day-to-day financial situation including their debt and spending habits so a client’s strategy can be progressed faster
  • Provide structure to a client’s finances to ensure clients meet the budget “must do’s”  while managing “nice to haves” easing decision fatigue
  • Create a feedback loop for the clients to flag unnecessary spending leading to an increase in funds available for debt reduction and wealth creation strategies.
  • Provide on-demand detailed reporting to the client about overall financial position including cashflow, banking, debt, and progress toward agreed goals, so clients could get strategic about their own personal financial position.
  • Lift stress from clients by building a bridge between their financial ambitions and day-to-day choices.

Australians need strategic financial advisors

For CPA Australia’s Financial Planning arm to succeed, they really do need to come up with a Value Proposition that differentiates them from the rest of the Financial Planning market. Offering the same services that are already available is not doing this.

Australians are in desperate need of assistance in relation to their everyday finances, like the service offered by Bill Butler.

Massive numbers of people are in financial stress, and there are even more who will be should interest rates rise. For a financial planning group to be struggling amid all of this opportunity indicates to us that their focus is still not in the right place.

Bill Butler wants to help Financial Advisors to solve this problem and enact the real Game Change.  We would welcome an audience with Alex Malley, or any member of the CPA concerned with the CPA Australia Financial Planning arms direction and, of course, we wholeheartedly welcome discussion with Strategic Financial Planners ready to tackle this messy challenge.

If you are a strategic Financial Planning practice who wants to scale your client’s cash flow management services, we would be delighted to talk to you about how Bill Butler can help your practice.  Get in touch.

DOWNLOAD WHITEPAPER – Outsourcing Cash Flow Management

Stephen

Stephen works as Business Development Manager at Bill Butler.  He has over 20 years experience working as a strategic Financial Planner (Adv Dip FP). His passion is assisting Financial Advisors and Businesses get proactive and make a difference to their client or employee financial success.  By partnering with Bill Butler, Advisors can take their clients to the next level. LinkedIn Profile