By Mandy Mitten*
At a recent roundtable event of ICAEW’s Tomorrow’s Practice research project, Alternative Business Structures were raised as one of the main topics affecting the future of the accounting industry.
Also known as multi-disciplinary practices, Alternative Business Structures (ABS) were originally designed to open up legal services, and provide an alternative to traditional firms of lawyers and solicitors.
For an accountancy firm, becoming an ABS could provide the opportunity to diversify services offered and provide a wider array of help and advice to clients, including guidance on probate, will writing and legal tax advice.
But is this really a good thing? Do accountants need to offer more services, or will they be spreading themselves too thinly?
Many accountancy firms are already regarded as something of a ‘one-stop shop’ for clients, offering much more than just the traditional accounting services. From guidance on financial planning and business solutions, to advice on profit growth and company structures, clients increasingly turn to their accountants for a wealth of information which they can trust.
For many accountants, this trust in providing sage advice on a host of topics is warranted. But many other accountants haven’t. They haven’t qualified as business coaches or had training on financial planning. They’re edging into territories they’re far from experts in, and this could be damaging for the whole accountancy profession.
ABS could only serve to compound this problem further.
Some larger accountancy firms have already taken the step towards ABS, expanding into law, town planning and surveying, offering clients probate services and face-to-face legal advice. This is great if they have the right staff in their business, or rather the appropriate experts to manage these services. But what if they don’t?
What if your accountant ends up trying to do too much, offering too many services, and spreading themselves too thinly?
You’d trust your accountant unreservedly to sort out your finances, so you may extend this trust to legal advice, only to be given misinformation or poor advice. Not only would this hurt the accountancy firm in question, it could also taint the reputation of the accountancy profession as a whole.
The trend might be favouring ABS but is that the right way for accountants to go? If you went to your dentist for a checkup, would you expect him to carry out some brain surgery for you?
The age old saying ‘jack of all trades, master of none’ springs to mind.
Of course, the alternative to becoming an ABS could be losing staff to another firm which is newly established as an ABS itself, as it looks to diversify its services and recruit qualified accountants for their expertise.
And it could be argued that many accountants know a lot more about the assets and liabilities of their clients than some solicitors, so they’re well placed to offer some legal advice. In this situation, there is a case to be made for becoming an ABS.
Perhaps partnerships of legal firms and accountants may be the way forward. Many may choose simply to continue with the unformalised relationships they have in place already. Because if an accountancy firm does become an ABS and spreads itself too thinly, then its own business and the business of its clients will inevitably suffer.
There are certainly exciting times ahead for the profession, and the creation of more ABS firms will undoubtedly bring about lots of change. It remains to be seen though whether this change will be good or bad.
*Mandy Mitten is the director of Mitten Clarke, a UK-based chartered accountancy firm