10 questions to ask your New Zealand accountant
The economic downturn has sent ripples of caution through New Zealand and Australian business ranks. If the accountancy standards underpinning a number of high-profile collapses were as bad as what they appear to have been, you may wonder how you can be sure to find a safe, competent and experienced accountant to handle your business finances in your new country.
But there are ways in which smart migrants can minimise their chances of hooking up with dodgy advisors. Here’s a list of 10 questions that newcomers to New Zealand and Australia should ask any financial advertiser, before handing over money.
1. What are you telling me about having a business plan?
Any financial advice needs to align or coherently build on your overall strategy. So be clear on what your objectives are and, at least broadly, on how you may achieve them. Any business plan will need to be thoroughly developed to ensure it will deliver on your objectives.
2. How much emphasis are you giving to cash flow?
Especially in the current environment of tight credit, cash is king. Be very clear on the timing and quantum of cash outflows and inflows. The volatility in most markets over past months demonstrates the risks associated with assuming capital growth will offset any cash deficiencies in the investment.
3. What is your recent track record?
One frequently heard piece of supposed investment wisdom – often used as a disclaimer by the investment houses and their advisors – is that past returns are no guarantee of future performance. The fact is, a consistent series of successful outcomes provides a more convincing endorsement than a series of failures!
4. How big is your team?
You may really connect with a particular individual, but the advice you receive should be able to be delivered by other members of the same team. The primary benefit? You will not be at risk if your advisor is away or, worse, becomes permanently unavailable.
5. What are your qualifications?
The person you deal with really should have suitable training, knowledge and experience. Any good sales person will be able to convince you that they are right, but what makes them any smarter than you in the area in which they are holding court?
6. What are your fees?
This should be simple. An hourly rate or a fixed fee – and, if possible, a “no-surprises” agreement.
7. Who has access or control of my money/investments?
Some firms ensure they have no access or control over client funds. Others use trust accounts or other mechanisms to isolate and manage client funds.
8. What happens if I am dissatisfied?
Is there a clear path to escalate issues within the firm? If that does not reach resolution, who will deal with it? Ideally there should be a client-advocate in the firm.
9. Is there any oversight or review?
Being a Chartered Accountant and holding a Certificate of Public Practice from the New Zealand Institute of Chartered Accountants, for instance, means that at least once every three years a review is undertaken by very experienced Chartered Accountants of the quality of the work undertaken and services provided. Shortcomings can have significant negative impacts.
10. Who among your existing clients can I contact?
Often you have been referred to the advisor by a trusted contact in the first place. Even so, it is great to talk to other clients regarding their experience. Really drill into what isn’t working perfectly with the accountant, because the person you are talking to is going to be a fan rather than a critic. You may need to press, but it is worth finding any weaknesses before you start.
So take your time. Ask loads of questions. And remember, by making the right decision, you’ll have not only an advisor but a partner in making your experience in our new country the best it can be.
Stephen Nicholas is a Chartered Accountant and CEO of Openside Accounting (www.openside.co.nz)
