Accountants vs Financial Planners
Is your most trusted advisor your accountant or your financial planner?
Numerous surveys consistently have clients (whether individuals, investors or small business owners) rating their public practice accountant as their most trusted advisor, turning to them for honest, independent and informed advice.
The reality is people turn to their accountant for advice they can trust ahead of financial planners, friends, family, lawyers, and bankers.
Three reasons accountants are rated much higher as trusted advisors than financial planners
- Accountants are independent
Australia has over 32,500 accounting practices and almost all of them (apart from a couple of exceptions) are independently owned and operated by their principles.
In contrast a large percentage of financial planners are not independent and are owned or affiliated with organisations like banks, dealer groups and financial institutions. A consolidation of financial planners and dealers groups has been occurring over the last five years and is gathering pace as all players in the industry strive for economies of scale and market share.
- Accountants are not salespeople
People turning to an accountant will not be sold a product or investment – accountants just provide advice and solutions. Financial planners however are frequently sales focussed and in the business of selling financial products to the consumer.
- Accountants are paid on an hourly basis, not commission
Accounting practices generate their income from fees charged solely to their clients. No income comes from third party commissions.
In contrast, many financial planners rely on the third party commissions from the banks, dealers groups, and financial institutions to make their business viable.
To be a trusted advisor means acting in the best interests of the client, not trying to maximize the advisors income from a client.