Sam ZervidesDirector & PrincipalAustralian Wealth SolutionsDeputy President – IPA Victoria

“Take Action Now to Bullet Proof Your Business Against the Rising Tide”

Disclosure

Practicing Certificate - MIPA

Professional CollaborationClient’s Best Interest

Bullet Proofing Tools

Lawyers

Mortgage BrokersAccountants

Insurers

Corporate Solicitors

Investment Managers

Challenges

What is the rising tide?

Diminishing Client Base

Legislative (APES 230)(SMSF Advice Unless Licensed)

ATO(Standardised ireturns)

Professional Development

“Embracing technology = more advisory & less low value”

Technology

BGL Xero MYOB

“Clunky data entry”

“Less value add”

Disruption AutomationObsolescence

myprosperity

Challenges

Challenges Vs Opportunity

Bullet Proofing

Double Pain

Exponential Growth

“Exponential growth is caused by compounding returns.”

Challenges

What could you do within your business to make it more valuable to the potential buyer?

What would the key challenges be and how would you overcome them?

Sell

Questions to Ourselves

“Accountants underestimate their clients’ need for services they don’t currently offer”

93% of small businesses rely on a public accountant for advice beyond standard compliance and tax-related matters.

⅕ businesses would also like to receive a business strategy.

Advice on financial future and growth

opportunities

“Looking in the rear-view mirror causes accidents, create a journey for your clients to

reach their destination.”*2017 Survey - IPA*”The Australian Accounting Industry” - NAB

“Accountants are rated the most important professional service provider by all SMEs, irrespective of location or turnover”

¼ of SMEs wouldn’t have gone into business if they realised the associated stress.

⅓ wished the engaged with an accountant earlier.

SMEs view their accountant as their most trusted business advisor more than one in two stated this.

*2017 Survey - IPA*”The Australian Accounting Industry” - NAB

“Time-based billing is the main billing method for accounting firms but most SMEs would prefer to be charged a fixed fee”

More than half of all fees accountants charge their business clients are generated by an hourly billing method.

However, more than one in two businesses would prefer fixed fees Only 16% would prefer to be billed hourly.

*2017 Survey - IPA*”The Australian Accounting Industry” - NAB

Client – Adviser RelationshipRoles & Responsibilities

YOUChairman of the Board

CEO of Family WealthDecision Maker

MeYour Financial Planner

Your Personal CFO

Project ManagerAnalyst, Strategist, Adviser, Intermediary

Lawyers

Accountants

Corporate

Solicitors

Mortgage

Brokers

Specialist

Lenders

Insurers

Investment

Management

Engagement Letter

John

Proposed Insurance

Life - $430,000TPD - $430,000IP - $7,828 pm

Agreed, 2 Year Wait,Benefit to Age 65

Personal

Super

CurrentAccumulation

Current: $98,051Retain: $5,000

Proposed Wrap Super

$93,051

Rollover all except $5,000

Wages$100,000

Proposed Insurance

Trauma - $160,000

$4,037 pa premiums

$2,896 pa premiums

Linked Policies

CurrentDefined Benefit

$531,334

$14,000pa (14%) SGC +$8,250pa Sal Sac (8.25%)

(Reduce by $250 pa)

InsuranceLife - $155,116

IP - $4,676Indemnity

90 day wait, 2 year benefit

$3,000pa SGC (3%)

Personal Cash

Jane

Proposed Insurance

Life - $1,000,000TPD - $1,000,000

IP - $3,131 pm

Agreed, Full Cover, 2 Year Wait,

Benefit to Age 65

Personal

Super

CurrentAccumulation

Current: $52,047Retain: $5,000

Proposed Wrap Super

$47,047

InsuranceLife - $49,000TPD - $49,000

Rollover $47,168

Wages$40,000pa

Proposed Insurance

Trauma - $160,000

Cancel once replaced

$2,963 pa premiums

$1,468 pa premiums

Linked Policies

$87 papremiums

$1,200 pa (3%) SGC

CurrentDefined Benefit

$7,687

$5,600 pa (14%) SGC +$3,300 pa (8.25%) Sal Sac

InsuranceLife - $105,875

IP - $2,403Indemnity,

Disability Only,90 day wait,

2 year benefit

Personal Cash

Fee Disclosure Statement

The future of a Accounting Business(if no action is taken)

Accounting Practice Valuation – 1x Revenue pa

The future of a Holistic Accounting Business

Accounting Practice Valuation – 3x Revenue pa

The IPA

What can the IPA do to cushion our members against the rising tide?

Consultants

Members

BusinessesIndividuals

PDMsMembers’ Hub Call Centre

• Conclusion

• Any Questions?