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Many firms are now setting up blended practices, combining tax and business accounting with other services, such as financial planning, superannuation and loans. Consolidation in the sector, cloud computing and the increasing outsourcing of work are driving accountants to team up with financial planning firms and mortgage brokers.

But firm leaders need to take care in managing blended practices. Practitioners point particularly to the need for accountants to set clear rules and communicate often with planners as well as clients.

Andrew Gale, principal and executive director of Chase Corporate Advisory, which works with many accounting firms in capital-raising and financial services, says the blended practice has become a distinctive trend.

“Certainly, we’re seeing a really strong convergence coming through in financial planning and accounting,’’ he notes.

There are many drivers, says Gale. “Part of it is the realisation from people, whether they’re from a planning background or an accounting background … that they have a desire to provide a truly holistic service, especially to their high-net-worth clients.”

Gale believes blended practices make sense, not only for financial planners who can benefit from accountants’ strong customer franchises, but also for accountants.

“If they are just offering accounting services, that’s fine, but it’s limited compared to what they could be doing,’’ he says. “If you really want to look after your SMEs and high-net-worth clients for a whole range of financial needs – whether it’s lending, asset finance, loan finance [or] investment matters – in many cases, the first person those clients come to is the accountant.”

Accountants who’ve established blended practices say they haven’t looked back.

Bill O’Shea, a sole practitioner at Robert J Nixon & Associates, has for the past 10 years provided services in audit, corporate secretarial, forensic accounting, superannuation, insurance and financial planning. His firm has more than $80 million in funds under management.

O’Shea acknowledges that some clients don’t want to put all their eggs in one basket, and that’s their choice. But the choice needs to be there, he says. He manages conflicts of interest by not advising on funds that he audits.

He contends that blended practices are the future for accounting. “The way public accounting is being done now is changing considerably,’’ O’Shea says. “Accountants have to change with it and you have to be diverse. You have so much going on now with the internet and outsourcing that accountants have to be more than just number crunchers and doing tax returns. They have to be business advisers.”

David Connell, a former accountant now consulting on practice management, agrees that the number of blended practices is growing, and he believes they are “the practice of the future’’.

“There is still room for both,” says Connell. “But the traditional accounting firm, devoted to clients and putting clients first and foremost, will become more like a boutique practice. They will still be there and they will still be needed, but the real growth will be with the corporate, commercial type of practice.

“The reality is that compliance work, with all the outsourcing and cloud computing, will be getting less and less. A lot of accountants are going to find that over time, unless they make some quick decisions.”

Connell favours what he calls a “corporate model” that brings together several professionals and looks after clients’ financial planning needs, as well as their tax and accounting requirements.

“For every dollar of compliance work in accounting practices now,” he says, “there’s at least another potential dollar in financial planning fees to be gained and at least another dollar of succession planning fees and another dollar of management fees. The potential to grow is unlimited.”

Hayes Knight Melbourne exemplifies that corporate model. It acquired a growing financial planning business when it merged with Clements Dunne & Bell in January 2013. The firm now operates in seven areas: business and tax services, financial planning, superannuation, corporate advisory, audit and assurance, Asian advisory and a family office for high-net-worth individuals.

Former Clements Dunne & Bell CEO Paul Clements led the firm into the Hayes Knight merger. Clements – now head of Hayes Knight’s financial planning division – says a blended practice not only makes business sense for accountants, it is better from a client’s perspective.

“If you’re managing the clients’ taxation and financial affairs, you are in a prime position to identify other areas that might improve their net wealth position or protection,’’ says Clements.

“If you’re doing it as an accountant, and doing their tax and accounting and helping their business, it just makes sense that you’ve got all this information to hand.

From a client’s point of view, conveying that once and going to the one firm is more efficient.

“Touch points with your clients increase,” says Clements. “You have your basic information about your client that comes out of doing their accounting and tax. You then add the other elements of financial planning, and what you end up with is a larger base of information about that client, which means that you can identify opportunities to assist that client in various other areas.”

This, says Clements, threw up the biggest challenge of the merger: the two firms had to bring their systems together and create one workable database. Hayes Knight Melbourne managing director Paul Dal Bosco says having financial planners on site also drives growth in a blended practice’s superannuation division. “It’s a good entree to financial planning; super funds need to put their funds in particular investments,” he says.

The philosophy, says Dal Bosco, is to have no silos. He asserts that if he has a client, he would refer that client to the firm’s audit, then its financial planning and super divisions.

Alongside its financial planning services, Clements Dunne & Bell already had a business, with tax and audit practice in place. Hayes Knight needed to add financial planning to its practice; Clements Dunne & Bell saw a merger as the perfect way to grow its financial planning division.

To make it work, say both Dal Bosco and Clements, you can’t communicate enough. Everyone has to pull together as a unit to maintain the culture. Every Tuesday, partners in the Hayes Knight Melbourne firm meet to discuss key issues and follow up with a monthly board meeting. Business for all units has been growing steadily since the merger.

Damien Moore is managing director and partner at Carrington Accounting Services in Adelaide, which manages business and tax, along with financial planning and mortgage broking. Moore says the bottom line is that clients need to have a choice. If he disagrees with what a client is being told by the firm’s financial planner, he’ll be up-front and tell the client he doesn’t agree.

“It’s no skin off my nose,’’ says Moore. “Realistically, I’d rather [have] the client know I’m looking after their best interests than looking out to make sure the other guy [his financial planning colleague] gets the financial planning client.”

That might have a silo effect. But as Moore reminds us, the client’s interests come first.