Omniwealth is actively seeking more joint ventures (JVs) with accountants given a good experience over the last four years of building successful JVs.
Referring work for clients is essential for all professionals but the problem many accountants fail to consider or simply don’t want to confront is the inequality of the referral.
The accountant referring clients to a planner will not get the same benefit to their business, particularly when selling the practice.
“We believe that referral arrangements need to be developed to a more professional level. JVs seem to produce deeper ongoing activity between both sides. Client disclosure is required by law and explaining a JV arrangement to clients has been quite straightforward for us at Omniwealth,” said Matthew Kidd, Chief Commercial Officer, Omniwealth.
How can a joint venture work?
A joint venture works with the establishment of a new company between referrers, with the proprietary interest owned 50-50. Percentage payment structures can work but often the best outcome occurs from agreeing discretionary sums for each referral.
JV fees are held in a joint account by both parties for full transparency.
Disturbing trends for ‘traditional’ accountants to consider
- There is no doubting that the standard compliance-based accounting practice valuations will drop over the next decade
- Legislation can be crippling for a one dimensional firm, such as more changes to licensing requirements
- Technology is the biggest threat. Cloud-based accountants that employ teams overseas, in countries such as Vietnam and the Philippines, will simply continue to bring the cost of preparing and lodging tax returns down, eventually pricing older style practices out of the market. Traditional accounting software has also been slow to adapt to new licensing requirements handed down by ASIC, leaving Accountants in a risky position.
- Many clients want productive team work between their accountant and financial planner. Many accountants are struggling to combat this requirement as they don’t have the resources to employ an adviser or buy one.
- Accountants referring to outside advisers then they are crazy due to the imbalance of the valuations between the different businesses.
Matthew Kidd
Chief Commercial Officer
Omniwealth
t: (02) 9112 4300
m: 0413 119 001
matt@omniwealth.com.au
www.omniwealth.com.au