A query that frequently arises is why someone would need an accountant, bookkeeper, tax agent and financial planner. Aren’t they all the same thing? The answer is definitely not. However that’s not to say there isn’t some overlap in knowledge and that they don’t have similar skills.
In this article, I’ll try and clarify the relationships so you can figure out who you need to help secure your financial future.
Let’s start at the top. The accountant. The best way to explain an accountant is to think of the medical profession. There are lots of doctors, but if you need a heart transplant, you won’t visit your GP. In the accounting profession, you have management accountants, auditors, tax accountants, project accountants, financial accountants. They can be in-house or part of an accounting firm. Each type works in a different environment; solves unique problems and has different skills, training and expertise. An accountant will have a degree in accounting, finance or economics and will usually be a member of a recognised accounting professional group. These include Chartered Accountants Australia & New Zealand (a CA); CPA Australia (a CPA); or the Institute of Public Accountants (MIPA).
A bookkeeper can be thought of as the person who processes and records accounting transactions. Bookkeeping is often regarded as the foundation of accounting and accountants will have done bookkeeping training (think debits and credits and double entry accounting!). They do not necessarily have a tertiary qualification and there is no specific professional organisation they should belong to.
A tax agent is a tax specialist and is registered with the Tax Practitioners Board (TPB). Being registered means that they are licensed to provide tax services to the public and charge a fee for providing their services. The registration must be renewed every three years and is subject to specific requirements including relevant experience, maintaining appropriate professional indemnity insurance and being a ‘fit and proper’ person. The TPB requires tax agents to hold tertiary qualifications in either law or accounting. The tertiary course must have included accountancy principles, Australian taxation law and commercial law. A public register is maintained by the TPB.
A financial planner is a qualified investment professional who can help you meet your long-term financial objectives. They will assist by analysing their client’s needs and capabilities to set goals and then prepare a strategy to help achieve those goals. In Australia, financial planners must be licensed by ASIC who maintain a register of advisers and specify the education, training and ethical standards required.
A financial planner will be able to advise on asset protection, superannuation, insurance, investments and estate planning. A good financial planner should also consider your tax position, but does not necessarily have specific tax qualifications. If they offer advice about the tax consequences of investments, they must be registered with the TPB. If a financial planner provides advice, then they must issue a Statement of Advice.
Whether you need a financial planner, accountant, tax agent or bookkeeper will depend very much on your circumstances. You may be able to find a professional who provides all services but likewise you may find it useful to involve more than one specialist. An important thing to remember is that if you do engage more than one professional, they MUST work together to ensure your best financial outcome is achieved.
Do you have further questions about choosing a finance professional? I’m more than happy to chat with you and offer a FREE 30 minute initial consultation. You can easily book online here and I look forward to helping you sort your finances!