Compliance vs advisory: share and share alike

Compliance vs advisory: share and share alike

Practices are looking to provide more services to clients, but that can create an internal tension between those providing traditional core offerings and those offering ‘advisory’. Stephen Tucker discusses why this happens, and how to break the tension.

Compliance vs advisory: share and share alike

It can be the case that there is tension and a lack of trust between businesses advisers and accountants – even when working in the same firm.

While things have moved on since my time at the Inland Revenue and working in practice, human nature and the psychology of your average accountant has arguably remained constant.

So why it is when an accountancy practice establishes its own in-house advice firm, is there often resistance to the internal referral of clients?

At heart, I believe this issue comes down to either a failure of culture, or a fear of contagion.

From an accountant’s perspective, we advisers live in a chaotic world of potentially adverse outcomes. We plan with the utmost care, carry out risk assessments, diversify portfolios and emphasise the long term.

Even if nothing ever goes wrong the prospect that it might, can cause an accountant to fear his client could be lost by association.

The introduction of a new service, such as offering advice or financial planning to accountancy clients, is a significant change event. This means there should be a change management process to follow.

In this case, if the accountancy partners fail to establish a guiding coalition where all partners agree to refer clients and ultimately bed this into the firm’s culture, the new service will fail to be adopted as envisaged.

The remedy is relatively simple. Review the change management process step-by-step, and enforce the process with key performance indicators.

Firms have to bypass the sceptical and make referrals between ‘accountancy’ and ‘advisory’ part of either their sign-up process or their annual audit review.

Accountants and advisers can be a corporate marriage made in heaven, with the power to work wonderfully, but only if you can resolve these issues around cultural failure and contagion fear.

For those advisers who already enjoy referrals from accountants, understanding these issues might help when it comes to discussing a potential joint venture with a firm which finds their internal service is not living up to their expectations.

Stephen Tucker is a senior consultant at Foulger Underwood, which supports accountancy practices, financial service organisations, and legal firms on their strategic and operational direction.

This is an abridged and edited version of an article Stephen wrote for Nucleus Financial.

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