Natural synergies

17 Apr 2014

By Shadforth Financial Group

Guest blogger: Jayson Forrest, Financial Planning magazine, April 2014

As brothers, David and Craig Raits have always been close. They studied the same subjects at school, obtained the same degree at university, became CPAs, and even now work for the same company. But as newly accredited CFP® practitioners, what motivated them to progressively move across from accountancy to financial planning? And why would they carve out similar careers? Was it coincidence or something planned?

David Raits smiles at the question. At age 47, he is the elder brother of Craig, who is two years his junior.

"Well, I've actually got two sisters as well and they're also accountants," David laughs.

But younger brother Craig takes a more reflective view on what kick-started his interest in finance.

"It probably started back in Year 10 and 11 at high school. Ultimately, as you're moving towards completing the Higher School Certificate, you've got to start specialising in your choice of subjects. I really enjoyed studying accounting, economics and legal studies. The alternative for me back then was a straight mathematics/science stream, which I didn't have an interest in. So, I've never regretted the direction I've gone in."

David adds that at Banyule High School, in the north-eastern Melbourne suburb of Heidelberg, where the brothers both attended, there was a particularly good teacher who made the subjects of accounting and law very enjoyable, which made all the difference to the brothers.

It was this early enjoyment of these subjects that encouraged them to major in Accountancy as part of their Bachelor of Business degree.

And so, with their respective careers firmly underway in separate public accounting practices, what motivated them to move into financial planning?

David reflects back.

"In 1994, I was a partner in a public accounting practice. The firm had recently started promoting financial planning to our clients and the take up from them was enormous. Indeed, the financial planning part of the practice began growing so quickly that we needed to get more hands on deck. With demand being so strong, from 1994 through to 1999, I worked as both an accountant and a financial planner, but gradually over that five-year period, I transitioned across to being a fulltime financial planner."

But Craig's reasons for progressively moving down the financial planning track were a little different to his brother.

"When I graduated from my accounting degree, as a graduate accountant, I ended up working for a public accounting practice that happened to specialise in self-managed superannuation funds, accounting, compliance and advice. So, that focus on SMSFs in my early years gave me exposure to financial planning strategies and investments."

In 1995, David's firm recruited Craig to run its SMSF department, which he did until 2003, when he moved across into a fulltime financial planning role within the practice.

Designation

With David already holding his CPA Financial Planning Speciality designation and actively involved in financial planning, it could have been easy for him to leave it at that. Instead, he decided to undertake further study and get the CFP® designation. But why?

Almost 'tongue-in-cheek', David points back to his long-standing friendship with the chief executive officer of the FPA, Mark Rantall, who he has known for the past 20 years. "And for those 20 years, Mark has consistently nagged me to get my CFP® certification. And while I won't say that's the main reason for me doing it, it certainly was a factor," David quips.

"But in all seriousness," he adds, "the main reason was that through the early stages, I saw myself first as an accountant doing financial planning. It's only been through the last 10 or so years that I've really seen myself as a financial planner first and foremost, rather than a CPA who was sidetracked into financial planning. So, in line with that switch over, it became time to get the CFP® designation that is recognised within this profession.

"And I also identified that while many people work across both fields, there weren't many people in Australia who have both the CPA and CFP® designations, and I saw this as a niche opportunity to be at the head of two aligned professions."

It wasn't hard for David and Craig to see the natural synergies between both professions.

"There are a lot of obvious synergies," David says. "In the client's eye, however, there is even more crossover between the professions than we think. There are a lot of people who think their accountant is their financial planner and vice versa. You could even say that for a lot of people, there's a 70-80 per cent crossover between what their planner might be doing and what their accountant might be doing. So, as a professional, I believe it makes sense to be able to do both accountancy and financial planning."

Exemption

As both brothers already hold the CPA Financial Planning Speciality designation, they were able to gain exemptions from CFP2 (Applied Strategies 1), CFP3 (Applied Strategies 2) and CFP4 (Investment Strategies) in the CFP® certification program. So, how did they find the CFP® pathway towards certification?

"Naturally, it was good that we didn't have to do the whole course," David says. "But what I did realise after starting was that we actually had to cover all of the content of the three units we got exemptions from anyway, in order to pass the exam. So, we both ended up having to read and study all the course material anyway," David says.

"So, for any accountant thinking about doing the CFP® certification program, the idea that you're really only doing 40 per cent of the course is a bit of a myth. The course is very challenging and is time-consuming. And as much as I had heard plenty of horror stories about the assignment in the final unit, actually preparing for the exam ended up requiring a lot more work than I thought."

And what about Craig?

"I agree with David. We had to obtain the course notes for those three exempted units, in order to properly prepare for the exam. As such, our exam preparation turned out to be a very time-consuming process because you had to self-learn those three units."

Study advice

The brothers approached the CFP® certification program by studying together; it was a collaborative effort. It's an approach they recommend for all prospective students.

But it wasn't just the two of them studying together, with Craig saying they had a semi-formal collaborative group comprising of four people. "I think that's what most people do and it was certainly the advice we received from the FPA."

Ultimately, the brothers found the four 'E's' to CFP® certification (ethics, education, examination and experience) a thorough process.

"Overall, the whole process covering those four areas was comprehensive, logical and worthwhile," says David.

So, do the brothers have any other advice for accountants considering a career in financial planning?

Craig points to two words – 'human interaction'.

"For a CPA who is currently working in public practice, they need to specifically consider the role of a financial planner, which involves a huge client contact focus – whether it's email, over the phone or face-to-face client appointments," he says.

"From my experience, there's a lot more human interaction in financial planning than accounting. A technical background is only part of what you need to bring to the table. It's the desire and skills set around human interaction that you need to have if you are looking to move from accounting to financial planning."

And David adds that constantly interacting with clients means that 'personality' is an important attribute for anybody considering financial planning as a profession.

"If you're an accountant who enjoys working behind the scenes with numbers and complex strategies – and many CPAs are like that – then you might need to question whether you've got the right type of personality required to enable you to enjoy working closely with clients every day," he says. "In contrast, someone in a public practice doing tax returns every day, which might not be technically difficult work, is used to interacting with the public all day, every day. In this case, then financial planning might be ideal for them to do."

It's a sentiment Craig agrees with. "So, if you enjoy working with the public, which I think is the most important factor to consider, then I think financial planning is a great profession to be a part of." ​​

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