(Slightly longer blog, it’s a big big hairy topic and I hope you get value from it)
It’s long been the thought around the board table here that UK professions will merge to some degree over the next decade.
The evidence is all around us…
Do you remember when garages sold fuel and not much else? Most are mini-supermarkets now. Speaking of Supermarkets, can you remember when electrical goods, clothes, films, music, medicine, garden bits and toys were not available in the aisles?
Accountants are increasingly interested in investment advice, financial advisers are beginning to understand the power of doing a client’s tax return, the city boys don’t care who hands them client monies to speculate with and why should legal man have a monopoly on will writing recurring income or probate?
As the decade progresses, if you don’t ring fence your clients you will be faced with having to defend them relentlessly from the other professions. Those who move across professions will likely see the biggest client land grab wins due to the principle of first mover advantage.
During one conversation last week an owner talked me through how it will be about understanding who was the primary and who was the secondary service provider. He believed accountancy would be the primary service in the future and hence that was where he was positioning his business (a quality wealth management firm). He was also of the opinion that each profession was doing its job reasonably but the lack of a linked up or overarching strategy was a massive detriment to clients. Apparently everyone does their job but nobody actually owns the clients overall real outcome?
Anyway, the prediction from here is that most professional services will remain face to face for the foreseeable future and certainly long enough for this to happen.
How much is outsourcing versus JV versus white label versus franchise versus true multi-disciplined is not so clear yet. Whatever your secondary service is will be the best candidate to be moved to a franchise or even a guided remote or internet based system.
Do you have any thoughts on this? Please just hit reply, I would love to hear them.
An interesting post, companies are adapting to clients needs and we’ll see more of this in the future.
Spot on Steve, we’re part of SJP, but have a separate business that prepares client tax returns, will writing etc. Its all about client ownership and control, I guess its back to the one stop shop of the 80’s/90’s! It helps that I’m a Chartered Accountant and Chartered Adviser.
Cheers
There is a definite creeping of professional roles at the moment and I suspect that this will continue for some time.
In terms of who is best placed to hold the primary role it has to be the financial planner.
Solicitors historically have had a reactive service based on clients’ specific need for legal work at key points (house move, divorce, etc.) and haven’t (on the whole) built close ongoing client relationships.
Accountants generally have better client relationships due to the need for annual meetings for tax returns, accounts, etc. but many are viewed as simply calculating the tax rather than helping clients with tax planning, although this has improved in recent times.
Good financial planners have great ongoing client relationships, oversee the whole process (financial, legal, tax, etc) and can genuinely change peoples lives with their advice.
As I sit here in my office on my 64th birthday, looking forward to at least another 5 – 10 years of exciting and productive business, I read your latest. A massive wave of deja vu overwhelmed me as I remembered the same conversations from three decades ago concerning Banking and Insurance.
If we learn one thing from the failure of “BankAsurance”, and believe me it failed (PPI being the most public evidence), it is that the consumer does not get a good outcome from a merger of conflicting business disciplines. The numbers look compelling but they do not account for the underlying management conflicts that arise within the supplying business.
Banking is risk averse, Insurance is risk embracing. Management brought up in one discipline find it counter-intuitive to operate in the other – so it stalls, makes mistakes and ultimately fails.
I fear the same for lawyers and accountants.
In addition the supermarket analogy is unsafe – the trend today is away from “one-stop” shopping. The concept of “customer control” or “ownership” is defective as the customer today becomes ever more sophisticated and able to discriminate between suppliers.
Very stimulating blog – keep it coming!
This is a business model I have been pursuing for some years, albeit, being an introducer to some of the services. I found out many years ago that some accountants & solicitors do not understand what financial services professionals do…and vice versa in many cases! Clients need a ‘holistic’ service not only in terms of their ‘FCA financial matters’ but across their whole life or business matters.
A reasonable view of the future . Ironically looks more like a bundled proposition than ever. Accountants surely are the first call in many financial encounters.
You asked for my thoughts on this.
Forgive me but the same article/blog post could have been written 5, 10. or even 20 years ago.
In fact 15-20 years ago there were plenty of accountants looking at whether and how to provide investment advice. These days most avoid it like the plague due to the additional regulatory burden.
Despite the new facility for MDPs there is no real movement towards combining layers, financial advisers and accountants under one banner – again due partly to the different regulators. Few professionals want to succumb to being regulated by more than body if they don’t need to do so. In my view MDPs will remain a minority sport into the forseeable future.
Sorry – but you did ask! 😉
Accountants certainly have access to those with disposable / manipulate wealth, but banks are the big failures here. I have pleaded with mine for decades to help me use money well – but they are hopeless.
As I see it, they lost their way when they chose to have Customers, not Clients. Its an important distinction, you sell Products to customers, but you put a clients’ interests first.
Not hugely relevant to your blog but:
Accountants! ARGGGGHHHH!!!!
They suck the life blood and soul out of decent unsuspecting companies!
Human beings become treat as statistics on balance sheets, this mentality may produce short term profit increase but will inevitably lead to demise!
They also don’t seem to have the term ‘quality’ in their vocabulary!