Accountancy firms have long banked on in-house financial planners to advise and guide their clients. This blend of accounting and financial advisory under one banner has been both convenient and efficient. But times are changing.
Rising indemnity costs, regulatory shifts, and the evolving expectations of the modern client are rewriting the script. A trend is emerging: accountancy firms are increasingly outsourcing financial planning, choosing to partner with dedicated Independent Financial Advisers (IFAs) that ensure both regulatory compliance and an unwavering commitment to the client.
The financial industry has seen some significant changes in the past few years. Between 2020 and 2022, indemnity costs skyrocketed by a staggering 55% . For many firms, this understandably prompted some introspection. How is it sustainable to maintain in-house financial planners for only a handful of clients each year?
But the changes weren’t solely financial. Regulatory requirements became more assertive, too. With the introduction of the FCA’s (Financial Conduct Authority) Consumer Duty rules, transparency is a word that all of us working in the industry have to get really familiar with. Client satisfaction guides our every financial decision.
Accountants and financial planners have necessarily had to reconsider their traditional roles and dynamics. At Pareto, we see this as an opportunity.
In today’s fast-paced world, clients seek more than just advice; they want holistic solutions. This is exactly what accountants and IFAs can provide when they work together seamlessly. Such a union is more than a mere transaction, it’s a genuine partnership. It demands mutual trust, a shared reservoir of industry insights, and a commitment to each and every client’s wants, needs, and expectations.
Here at Pareto, we’re ahead of the curve. We’ve successfully partnered with 14 distinguished accountancy firms, which has paid dividends for the client experience. Our partnerships allow us to serve as an extended arm of these firms, ensuring clients receive consistent services, irrespective of who they interact with. This collaborative, cohesive partnership is the way forward.
We’re already seeing how these partnerships build crucial trust between all parties involved. As any accountant knows, when your clients confide in you, they’re implicitly trusting those you recommend. This makes choosing an IFA partner an important task. Beyond professional compatibility, there must be a deeper understanding, a connection that ensures your partner IFA understands, and can even anticipate, your clients’ needs. These partnerships guarantee a streamlined, professional, and enjoyable client experience. That right there is the foundation for a long and fruitful relationship for everyone.
Clients today are not interested in bouncing between advisors, receiving inconsistent advice or sensing a disconnect between their accountant and financial adviser. And who can blame them?
When accountants and IFAs come together, prioritising an integrated experience for their clients that, crucially, adheres to regulatory requirements, it creates a winning formula. Our clients stand to gain the most, supported by a team that’s truly in sync with their vision.
The financial world may be in flux, but those who adapt will thrive. By rethinking the accountant-IFA relationship and emphasising collaboration, we can ensure that our clients get nothing short of excellence. At Pareto, we’re committed to this ideal, championing partnerships that prioritise the client above all.
Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.
The Financial Conduct Authority (FCA) does not regulate tax advice, estate planning, trusts or will writing.
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