Behind the business - accountants and the potential of personal financial planning

There is an advice gap in the UK, heightened by the pandemic.

Some people think financial advice is too expensive, or that they might not have enough money to attract an adviser. Some think that face to face advice is only for those with a large amount to invest-possibly coming up to retirement. 

In many ways all of the above is fair. The problem though is the financial services industry, certainly the IFA space, is struggling to meet demand. A survey conducted in 2020 by Octopus Investments found that some 60% of advisers interviewed had turned clients away in the previous twelve months, and a similar percentage were looking to retire by 2030!

What is the accountancy profession doing to help?

Well, the good news is that Chartered and Certified Accountants practising in the UK have the ability to apply for a Designated Professional Body (DPB) Licence. To be fair, they have had for 20 odd years and many use it to support the sale of “fee protection insurance”, others to take part in the Corporate Finance chain-M&A activity.

The above is great, but SME owners need access to financial advice too. The danger is that many accounting firms don’t do enough to identify when and what financial advice clients might want or indeed need.

The DPB Licence is often used to make a referral to an IFA, rather than to determine the specific requirement. It could be the client just needs an idea of what they need to sell their business for in the future, or maybe how much they can afford to save. These are things the accountant can help with.

Who better to produce a financial plan for the client than their accountant? Being blunt, if IFAs have a bandwidth problem at the moment why make it worse if it is something you can do yourself. Remember, the DPB Licence gives you the power to make regulatory referrals, but sometimes this may not be necessary.

We may or may not be through the worst of the pandemic, but surely it is incumbent on the profession to help the UK “build back better” with or without “Boris”!

It may come as a shock to the reader, but the ICAEW, for example, is quite keen on helping members explore the benefits of their DPB Licence-so give them a nudge….. 

Don’t forget to sign up for our upcoming two part webinar with John Gaskell and Della Hudson respectively, on the 18th and 25th November 2021. For more information and to register click here!