I have just read a report in Accountancy Magazine about some research published by the UK 200 group. The report notes that:
Clients are more likely to ditch their accountants for giving therm incorrect or poor advice than for being too expensive......Clients only rate high fees as the THIRD most important reason for switching accountants behind incorrect or poor advice (87%) and lack of personal contact (66%).
Two other key points noted in the short report:
- Tax planning was rated as the most valued service;
- Around 60% of respondents had been with their accountants for upwards of five years;
I'm always dubious about drawing conclusions from surveys and reports when there are no details as to how the data was collected or of how representative was the sample surveyed. So with that caveat what do I conclude from this brief report of the UK 200 group's research?
1 - It seems to vindicate my view that more accountants could increase their fees without losing too many clients. Indeed, those most likely to leave are probably the D-list clients that you want to ditch anyway. Much depends on how you raise the subject and how you implement the fees increase of course.
2 - It reinforces the rationale for the formation of the The Tax Advice Network - which enables accountants to access vetted, independent, cost effective and expert tax specialists. Accountants can use our specialists to provide second opinions and so avoid giving "incorrect or poor advice" and to enable them to provide an appropriate level of "tax planning" to clients.
3 - It confirms my view that clients will pay decent fees for good advice.
When I ran the tax support for professionals team at a large tax consultancy, a few years ago, I noted that accountants were reluctant to engage the firm and often said things like "My clients are used to only paying £300 a year. They'd never pay £2,000 for tax planning advice." I'd be the first to accept that an accountant knows their clients best. Equally I have long felt that some accountants undervalue the advice they provide and make incorrect assumptions about the level of fees some clients would pay if the cost/benefit ratio made sense.
The UK 200 group's survey suggests that many clients are more interested in getting the right advice than in paying low fees - especially when it comes to the provision of tax planning advice.