Accountant/mortgage broker

Hello PC community!

Long term SS forum troll here but rarely ever posted.

I am planning on purchasing my first IP in the next few months.

I have an accountant that I have been using for the last few years that I trust and he has recently become a mortgage broker.

Are there issues that could arise from me using the one person for both or am I better off by having them consolidated?

Thanks for your replies

 

@Dogrocks

two things, Conflict of interest and duty of disclosure! (i am sure other will add on more to it)

if those are covered, you are fine! in fact, it can work in your favor!

 

Next time you see him, take a bucket of hot chips and gauge his reaction.

 

Personally - I'd keep it separate.

I'd want to know that my accountant is awesome at their core business - and likewise for my finance person.

It would be difficult for the one person to excel in both areas (not impossible - but difficult).

Cheers

Jamie

 

I agree with Jamie, even though I am an accountant by profession, I do not mix the work. It is difficult to be a master of all things and I would advocate a range of view from different professions so you are more likely to get independent advice rather than get caught by the influence of payment/commission for services.

Good luck with it

 

My experience with accountants/brokers hasn't been all that good - one particularly was a great accountant, but couldn't see past his own conservatism from a finance perspective. It was hugely annoying when he offered a shared client finance advice counter to my own. While he was great at being an accountant, he had the potential to stop my client in her tracks investment wise.

I'm sure his heart was in the right place, but grrr....

 

I don't sell ANY property for a reason. I want to be independent. How can he not give conflicted advice ?

Personally I would use an expert in each area. You cant be an expert broker and an expert accountant etc. You might be good / OK but if you don't have a 100% investment in it its just a revenue stream not a specialisation.

 

Ah as long as their good and capable in both fields, it should be OK. I'm sure there are some who do both that are better than others who specialise.

As others have said, i'd personally keep it separate. It can work in your favour having multiple perspectives. At the same time, if theres trust there and they demonstrate capability, its not a model that i'd rule out (can save time, can assist in preparing financials in a bank friendly way, etc).

Cheers,
Redom

 

Jess,
I hear what you say. Many accountants by nature are conservative, looking behind rather than in front and hindsight is powerful but often may not help a client achieve their goals. It is about finding an accountant who is an investor themselves so understands a little of what drives clients to invest and finding a good accountant is one who will give the advice to sometimes counter balance what sales people can promise. I would much rather have someone say - be aware of the risks and have you got these 'whatever scenario' covered. Then based on assumptions that are realistic, be able to project a financial future/outcome.

The client then gets a range of views and can make the decision with eyes open. Some accountants and tax agents I have dealt with over the years leaves much to be desired, but then it is the same of any profession. I find it is talking about goals and which path they need to take to achieve them that influences what clients then do.

 

My two cents - I'm a Chartered Accountant and a Broker, its up to the client to decide who he/she is comfortable with.

Generally as i'm a Chartered Accountant, clients will use that Qualification and believe I know everything - I don't and tell my clients this very clearly.

Alot of accountants have no idea about which entity a person should purchase in i.e personal name, the wife, company, trust etc. This is an extremely important decision to start the investing process, generally I have a fair idea, but DONOT advise on structures.

So - if you have a gun accountant who is a broker too, and he discloses the conflict and comms, then go for it, otherwise, seek independent advice in either accounting/ tax or mortgages, again you have to start at square one....i.e describe your personal situation which can be frustrating for many, especially when they have been with an accountant for years and established trust/ rapport with that person. Generally people like to have their affairs with one person/ firm only...

Cheers Ivan

 

Ignoring competence and potential conflicts of interest out of it, I think there's arguments both ways.

An accountant should have an excellent grasp on how to structure loans to get maximum tax effectiveness out of them so there's a natural match between the two on that level.

For people who are self employed however there is a conflict. Accountant aim to get the client to pay as little tax as possible, but the clients ability to qualify for finance is improved by paying more tax. Some days a competent accountant can create real headaches for a broker.

Both fields are more complex than the other tends to appreciate. It is difficult to do everything well so on balance I'd want to go with a specialist in each field. The best individuals in each field would have a good understanding of what the other does and why. They'll be able to implement solutions in their respective fields that accommodate the other, rather than get in the others way.

 

You mean like Terry?

 

Thank you very much for the detailed responses

I think that the best way forward will be having a meeting with my accountant and making my expectations/trepidations clear to see how he feels about them and if he has the investment knowledge then progress from there.

Thanks everyone!

 

There would be no legal conflict of interest for an accountant to be acting as a broker and a tax agent for the same clients. I cannot imagine any scenario where it could be a conflict of interest except perhaps signing off on a bank requirement for taxation advice on a loan (never seen this requirement).

It would be different for a lawyer, for example, I would never give legal advice in relation to loan agreements where I was also acting as the broker. But I usually give tax advice about the deductibility of interest (as a lawyer) when setting up loans (as a broker).

 

Hello nothing bad at all.. but do not keep your eggs in one basket.. What if you have a bad experience with him / her in terms of mortgage broking would you still use them for accounting?

 

Nothing wrong to be capable of multiple fields.

What I think most people wrong about it conflict of interest or maybe not professional enough the the level they should be.

At the end of the day, it's about whether he/she can provide the solution/service which you are looking for.