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Diminishing compliance revenue should be seen by accountants as an opportunity and not a threat, according to Fortnum Professional Strategies' Scott Charlton.
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Attack on compliance a great opportunity, says Fortnum
06 January 2015
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Mr Charlton, a chartered accountant and the leader of Fortnum Professional Strategies, told AccountantsDaily that he believes moving into financial services will help smaller accounting firms drive growth despite the current attack on compliance work.
Mr Charlton said this attack is coming on a number of fronts and compliance work will inevitably lose its value.
“There are pressures around the edges, like self-managed super fund administrators who do a similar service to accountants but these administrators do it in real time and at much cheaper prices.
“In addition, other firms have embraced outsourcing whereby they can reduce their cost and even the tax office is actively working to reduce the amount of work that accountants are doing."
As a result, Mr Charlton said that accountancy firms will no longer be able to survive as a “tax factory”.
“I think clients will increasingly see the usual taxation compliance stuff as a commodity and once you get into the commodities space then you’re in a world of hurt because there will always be some idiot who will do it cheaper.”
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Despite this potential loss in revenue, Mr Charlton said he believes the change occurring within the industry is more an opportunity than a threat for accountants.
“The traditional compliance work will be shrinking, so is it an opportunity or a threat? It can be a threat if you just continue to do nothing and keep the blinkers on, but it can be an opportunity if you say, 'Well the resources that we have been using to run this tax factory, we can actually apply those to providing services that clients actually value'.
“Clients want and expect their accountant to be across all of their financial affairs. They want their accountants to be involved but accountants have been traditionally holding back and I think the time for holding back is fast coming to an end,” Mr Charlton said.
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