Integrating planning and accounting: a case study

Smart practice

Wednesday 22 March 2017

How a focus on culture and technology helped Quill overcome the challenges of building a converged client offer

If you run a financial advisory or accounting practice, chances are you've agonised over which business model will give you the edge now that regulatory changes are firmly in place and demand for financial advice is increasing.

For many, the incentive to offer clients combined accounting and financial planning services is greater than ever. What many don’t realise, however, is that setting up a multidisciplinary practice isn’t as easy as it looks.

Kevin Nicol, CEO of Queensland-based Quill Group, is one of the few practice owners who saw the value in a multidisciplinary firm long before the fallout from the GFC or the first debate about the accountants’ exemption.

Starting as a small practice earning $30,000 annually in fees, Nicol grew Quill Group into a multidisciplinary offering that earned $10 million in revenue in the 2016 financial year.

While Quill is a success story, its achievements didn’t happen overnight. From the early days of joint ventures and acquisitions, to referral partnerships that at times only generated one-way referrals, to major challenges with systems integration, Quill has lived through it all.

If you ask about why the team persevered, Nicol will tell you their philosophy is quite simple.

“Our ambition to provide a ‘one-stop financial services shop’ has always been driven by the belief that a client can be better served if the left hand knows what the right hand is doing,” Nicol says.

“Clients often don’t know where accounting ends and financial planning begins. With a converged business model, the client experience is seamless. Clients are ‘introduced’ rather than ‘referred’ to another professional. This is really important because it creates a stronger focus on outcomes in the client’s best interests.”

From its roots as a small accounting practice, Quill has grown to offer accounting, financial planning, insurance and self-managed super fund (SMSF) services from three offices and today has over 60 staff in Brisbane and the Gold Coast.

Both the accounting and financial planning divisions are mature businesses. The SMSF division, Superfund Wholesale, was added six years ago with 36 SMSFs. It’s now the firm’s fastest growing division, servicing close to 2,000 SMSFs with $1 billion under administration. In July it picked up an award for SMSF Administrator of the Year.

Each entity had different shareholdings and the directors began to understand the difficulty of running a multidisciplinary practice that hadn’t truly converged.

On the growth path

Quill’s journey began when Nicol, having started his career in a large accounting firm, knew he needed to find business partners for his accounting practice who could provide sound financial advice.

“I put a lot of research into finding the right planner, mostly based on what clients were saying. I previously had a referral relationship with Peter Kirk who owned a financial planning practice in Brisbane. The feedback from clients was that Peter walked on water,” Nicol laughs.

Kirk joined Nicol in a 50/50 joint venture in 2004, while still retaining 100% of his Brisbane financial planning practice. In 2007, they merged with another financial planning firm.

At that point, each entity had different shareholdings and the directors began to understand the difficulty of running a multidisciplinary practice that hadn’t truly converged.

“The planners had no equity in the accounting practice and had no financial incentive to refer accounting work, however they were dependent on referrals from the relationships held by my accountants,” Nicol says.

“As I owned equity in both divisions, I needed something to change. In 2011, we acquired a significant Brisbane accounting practice and took that opportunity to review our strategy and roll all of the equity into a single holding company with fully owned subsidiaries.”

With all business units now operating under a single entity, the business was structured to deliver a seamless accounting and financial planning service - and the pressure was on to deliver a quality client experience. This was no easy feat with three sets of teams, processes and systems.

We needed to change our thinking and become proficient with new systems and different processes to provide clients with frictionless solutions,” Nicol said.

A defining moment arrived in 2012, when Quill acquired a small cloud-based accounting practice to bring crucial knowledge and experience in-house and ‘springboard the firm into the 21st century.’

Technology and the road to ‘robo’

The acquisition prompted another set of challenges – the biggest of which was how to better use technology to enable their growth journey and help Quill keep the customer front of mind.

“Technology disruption has been and will continue to be, massive. Coming to grips with a different way of thinking and better processes to interact with clients provides lots of opportunities,” Nicol says.

“I’m not just talking about cloud versus desktop applications, but more importantly customer relationship management (CRM) systems. With our business, we have three divisions and three databases on three different software solutions. While they are all cloud-based, finding a CRM that can integrate data into one source of truth is ridiculously expensive.

“Building a single of truth is important because when a client calls, you should be able to look at your CRM and know who is working on each area of their portfolio and each area’s current status. You should be able to see that the SMSF team are chasing queries to complete their work, that we are 99% complete on their accounting work and that they have an appointment to see our financial planner next week.”

To overcome this challenge, Quill created a full-time IT division dedicated to developing systems that will connect their three databases to allow them to gain an integrated view of the client’s affairs and prevent double handling of transactions.

”The single client view will help us communicate more effectively with clients, and iron out simple data entry issues, such as not updating personal information across all systems.

“Clients see communication as a hygiene factor. You can easily lose a client over this stuff.

“It will also help our accountants and planners to build a stronger understanding of each others’ clients at any point in time, which is critical in a firm like ours.”

Defining our client value proposition and our values has driven the biggest cultural change I have seen in my business in the last 17 years.

A cultural affair

Another major growth challenge for Quill was uniting their disparate team and creating a cohesive culture that aligned to the business objectives.

Two years ago, Quill engaged a business consultant to help them draw up a three-year strategic plan. That process included an all-staff workshop to articulate the firm’s client value proposition (CVP).

From a staff point of view, the CVP work allowed Quill to define its core business values, which Nicol says have really resonated with the team.

“Being ‘absolutely accountable’, ‘insatiably positive’ and ‘passionate advocates’ in everything we do internally and with every client interaction helps us deliver against our new brand promise: Shaping Your Future.

“Defining our CVP and our core values has driven the biggest cultural change I have seen in the business in the last 17 years.

“When you have a collective understanding of your CVP and business values, it’s amazing what outcomes you see. It becomes very clear who is living the values and who isn’t – it effectively becomes a barometer for cultural fit.”

Nicol says he reinforces core values and the firm’s client-centric focus in every staff meeting and regularly celebrates success stories when different business divisions come together to help a client.

Quill also holds formal and informal training and mentoring sessions, where employees can share information and talk about what is and isn’t working for the client.

“Keeping these concepts top of mind means that as opportunities arise to help the client across divisions, our people are equipped to make appropriate introductions in other parts of the business. Building a culture where we all understand the firm’s complete offering makes it easier to deliver a positive experience for our clients.”

As more Australian consumers turn to financial advice and expect their needs to be addressed holistically, the one-stop financial advice model just might be the one to watch in the post-regulatory world.

Nicol’s advice to business owners who are thinking about a multidisciplinary approach is this: don’t take the decision to integrate your services lightly. Quill’s path to success involved a trial-and-error run of joint ventures and acquisitions, referral partnerships that, at times, didn’t perform and back-office challenges. Ultimately, a strong focus on culture, communication and finding ways to use technology as an enabler, allowed Quill to realise its vision as a multidisciplinary firm.

“The key takeout for me is that you need to choose the business model that aligns with your objectives – and then grab the opportunity with both hands. Sure there will be challenges, but if you stay focused on the end goal – giving your clients a great experience along with services that meet their needs – then ultimately you will succeed,” Nicol says.

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