It’s not always the case, but it’s often true that accountancy firms with an in-house advice arm don’t trust the advisers they’re working alongside.

    In the early days of my career I spent 10 years working as a tax adviser and latterly as an adviser for two top 10 firms.

    While things have moved on a lot in that time, human nature and the psychology of your average accountant has arguably remained constant. 

    So I find myself wondering why it is that when an accountancy practice establishes its own in-house advice firm, there seems to be a resistance to the internal referral of clients.

    At heart, I believe this issue comes down to either a failure of culture or a fear of contagion. 

    Cultural failure

    Let’s start by addressing cultural failure. 

    I’ve previously discussed the John Kotter approach to change management (you can catch up on that article here). 

    The introduction of a new service, such as offering advice or financial planning to accountancy clients, is a significant change event. This means there should be a set change management process to follow.

    In this case, if the accountancy partners fail to establish a guiding coalition where all partners agree to refer clients and ultimately bed this into the firm’s culture, the new service will fail to be adopted as envisaged. 

    The remedy is relatively simple. Review the change management process step-by-step, and enforce the process with key performance indicators.

    Firms have to bypass the sceptical and make referrals between the accountancy and advice firms part of either their sign-up process or their annual audit review.

    To encourage more junior staff to comply, you may want to consider introducing some form of carrot and stick bonus structure, or a monthly reporting system. There are endless means to the desired end but if you want it to work, you have to work at it. 

    Contagion fear

    This is a very real and understandable fear. Accountants live in a world of known outcomes tested by annual audit and sign-off by HM Revenue & Customs.

    From an accountant’s perspective, we advisers live in a chaotic world of potentially adverse outcomes. We plan with the utmost care, carry out risk assessments, diversify portfolios and emphasise the long term. 

    But by its very nature the unknown is exactly that. Even if nothing ever goes wrong, the prospect that it might can cause an accountant to fear his client could be lost by association. 

    One remedy might be to create a bit of distance between the referring partner and the adviser, perhaps by rebranding the advice firm and making it distinct from the accountancy practice.

    The extreme interpretation of this would be to sell off the in-house advice arm to a joint vehicle with another advice firm.

    Another option might be to tackle accountants’ fear and wariness at the source, potentially by requiring all partners to have, say, their pensions handled by the adviser firm in question.

    First-hand experience of a thorough, professional and trustworthy advice process is likely to go some way in reassuring an accountant that their referred clients are not about to turn on the adviser and/or the accountant down the line. 

    Overall, an internal advice business can add great value to an accountancy firm, and the lead generation capability of working with accountants is a potential gold mine for a good adviser.

    And that’s before we even get to the positive client outcomes that can be driven from a more joined-up process.

    Accountants and advisers can be a corporate marriage made in heaven which has the power to work wonderfully, but only if you can resolve these issues around cultural failure and contagion fear.

    For those advisers who already enjoy referrals from accountants, understanding these issues might help when it comes to discussing a potential joint venture with a firm which finds their internal service is not living up to their expectations. 

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