Financial Adviser, Tax Agent, Accountant - Which One(s) Do I Need?

Peter Enis on 09/08/2018 - 13:24

Hi all,

TLDR: What are the differences between a financial adviser, accountant / tag agent etc?

Basically I'm just trying to work out who I need to go and see for my situation.

Background: I'm in my early 40's, have almost always done my own tax via eTax & MyTax. Went to a tax agent for a few years but I wasn't really getting much benefit, however this was before property ownership. I have never seen a financial adviser nor do I have an accountant. I now own 3 properties and have a modest share portfolio. Currently we are a family of "rentvesters", as while we own 3 properties, we don't have a PPOR.

We would like to buy a family home next year and thinking about selling one of the properties (and I'm leaning towards selling the one that previously WAS our PPOR until we outgrew it - as it still falls within the 6-year CGT ruling if I understand correctly - ie, for tax purposes it is still our PPOR even though we don't live there).

I really need professional input on the situation to help decide which property I should be selling, or maybe not even selling at all. Also whether or not I'm doing this all properly in the first place or could my money be working better for me.

But who do I see? A financial adviser? Do they offer tax advice? Do I look for an accountant that specialises in property and taxation? I've got no idea.

Thanks.

Financial

Comments

  • spiff on 09/08/2018 - 13:43
    +5

    Look for an accountant that specialises in property tax. Preferably one that is personally experienced in property investing. Financial advisers will just tell you to invest in shares and salary sacrifice into super.

    • Some Guy on 09/08/2018 - 13:53
      +2

      'nuff said - Close thread.

      Also, a financial adviser will also sell you a tonne of insurance.

    • mskeggs on 09/08/2018 - 13:54
      +3

      I also agree a competent accountant is what you need.
      My preference would be for a good all rounder who you can develop an ongoing relationship with over years to come.
      I prepare my own accounts for tax, but happily pay my accountant to produce my return as he allows me to kick around ideas, confirm my understanding of changing rules and provides advice personal to my situation.

      And his fee is tax deductible.

      And while he doesn't produce financial advice to me, he will say things like "with all those houses, I guess you will looking to diversify some of your investments".

      Ask around for personal recommendations.

      • Peter Enis on 09/08/2018 - 14:06

        Thanks all, great advice so far.

  • HighAndDry on 09/08/2018 - 13:56

    Por que no los tres?

    Seriously though - you need a tax accountant for which property to sell and tax implications. You need a financial adviser for broader advice (e.g. Whether you should sell at all, whether you should keep your money in property or diversify into other investments depending on your risk appetite, whether you should liquidate all your assets and bury it as cash under your bed, etc). Oh, and yeah once you do all those things, see a tax agent to do your tax returns each year (or just go with your accountant, but a tax agent might be cheaper).

  • garetz on 09/08/2018 - 15:48

    You need a financial advisor before you decide to actually go ahead with investments, you put the cart before the horse and actually bought shares/properties, maybe they could of helped with how to structure the investments and if they were worthy investments to begin with, so its abit late for that.

    A tax agent is an accountant who just does your tax returns, you are better off finding a good accountant who also can function as a tax agent and also give you advice on your investments.

    • spiff on 09/08/2018 - 16:33

      Majority of Financial Advisers will push you towards the investment and insurance products that will give themselves the most return. They will justify the investment's "worthiness" some how if the commission is decent. Accountants would probably be in a better position to advise on investment structure, and if you're talking about property investment, then you need to look for a property savvy tax accountant. You're right in that a tax agent's job is to do tax returns. Sometimes they could provide advice on small business finance and accounting but investment advice is too far out of their professional wheelhouse.

      • HighAndDry on 09/08/2018 - 18:17

        Not sure about "majority", but yes - when looking for a financial adviser, make very certain that you're paying them, and no one else. By law they have to provide you with disclosures of what incentives or other remuneration they'll receive on your file, so just make sure that the only things listed are: Yourself, and (if any) Only commissions based on the performance of your investments (so that their incentives are aligned with your best interests).

  • empty456 on 09/08/2018 - 19:42

    Sounds like you need a tax (financial) adviser. https://asic.gov.au/regulatory-resources/financial-services/…

    I would suggest looking around for independent financial planners (who will not sell you their products because they have none to sell) who are also registered tax agents.

  • ms_caz on 09/08/2018 - 21:12

    We were in a similar situation as you for a while - we had a tax agent prepare our returns. He was able to cope with the tax implications of multiple properties, but when we started talking about what else we could/should do with our money, he gave us the card for a financial advisor. For some reason we never got around to making the financial advisor appointment, and in the meantime our tax agent left the business where he was working due to family commitments.The next tax year we had a replacement through the company - he was very straight down the line - filled in forms and not much more in the way of discussion etc - some things he did not know and my husband had to remind him/inform him of in terms of property investment. This led us to search for a new "person".

    We found a local accountant who advertised that he dealt with property matters, and made an appointment to see him (well before tax time). He spent a good half hour at our intro meeting talking to us about our situation - not giving any advice at this time - but seeing if we "fit" with what he offered/could do. He did not charge us for this. We felt comfortable with him and moved out business to him. He charges more for a tax return than the tax agent did and is a little bit more conservative in what he allows as deductions, but he is able to discuss and advise us in finance and property matters and has helped us to form a plan. Note - he has not told us what to do but listened and let us know his thoughts and pointed us towards things we may have not considered.

    IMO - it is definitely worth seeking out somebody who can spend time with you to listen and discuss. You need to go shopping for somebody and give yourself lots of time to do this - obviously it's not a good idea to go searching when it is actually tax time. Perhaps stick with an agent for this year and then start interviewing for somebody who "fits" you for future advice.

  • horsome on 11/08/2018 - 00:49

    A good experienced accountant is all you will need. Financial planners/advisors come second.

    Accountants legally can’t actually give you financial advice so what some do is pair up with financial advisors who are licensed or have them in their firm to assist with these matters and set up better structures if need be.

    Financial planners will first and foremost direct you to buy shares and insurance as that is how they make money. Tax advice comes second. And pretty much forget property advice.

    Financial planners have their place but make sure you have a good accountant in front of them to get the right advice.

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