How Accountants Are Addressing Tech Challenges
Thanks to evolving technologies, the accounting industry is facing significant changes. Financial consulting firms and accountants are desperately seeking solutions to finding and retaining high-quality young professionals in an industry with evolving technology and instant investing.
The tech-savvy millennials are changing traditional practices while holding the future of the financial sector with mobile banking, robo-advising and around-the-clock communication.
More Technology, Fewer People
As with most industries, the introduction of technology continues to reduce the number of people needed to complete tasks. According to one industry leader, 10 people can now accomplish the tasks that used to belong to 70 employees.
Although this is great for the bottom line, it can also mean a future shortage of accountants and financial advisers as employees retire. As many as 10,000 advisers will be in demand by the year 2020 due to the career’s shrinking population.`
To increase the number of young professionals, a panel of industry leaders gathered at the University of Albany to suggest ideas and answer questions regarding the industry. One expert recommended showing millennials the bigger picture. For example, many young professionals are less interested in money but will work hard to grab a promotion or an opportunity to give back to their community.
Some firms may find it advantageous to spend more time with fewer, wealthier clientele than trying to serve several hundred clients at once. In an age of advancing technology, accountants and consultants need to assume the roles of advising clients, acquiring stocks, diversifying portfolios and investing in retirement to stay relevant and indispensable to their customers.
Advisers on Call 24/7
With the mainstream use of text messaging and emails, fewer people are adhering to office hours and phone calls. Financial advisers could receive messages from clients in the evening or weekends, and the client may expect an answer immediately.
The older clientele will probably recruit their children to manage their businesses and wealth. This new generation seems to be quicker with technology, so younger professionals could be more open to communicating with them through text and email. Seasoned professionals will need to adapt to the needs of their new clientele or risk losing business.
Instant Investing and the Future
The accessibility of robo-advising allows people to invest on their terms and on their own time. However, when it comes to investing, experts caution against instant gratification. The ease of clicking to buy and sell makes short-term investing frequent, but clients may see better returns by investing long-term, such as a 3 to 10-year plan. A financial adviser can lead a customer to the best-diversified investments for their situation.
Advising firms should not steer clients away from robo-advising and instant investing, but instead use it as a tool. Financial advisers and accountants should adapt to the real-time technology while providing professional advice to their clients.
A Younger Generation of Employees
A critical issue seasoned financial advisers and accountants are facing is the search for qualified new hires to replace retiring consultants. Unfortunately, many of the new employees and interns are familiar with easy-to-use accounting apps and software but lack the basics of accounting. Thanks to mobile banking, QuickBooks and Turbo Tax, many millennials are missing the fundamental details found in bank ledgers and paper 1040 tax forms.
Because of this, firms are having to teach new employees the nuts and bolts of debits and credit before they can delve deeper into the stock market, investments and financial products. The University of Albany is trying to prepare students for real-world application by forgoing software accounting programs in their introductory and intermediate accounting courses.
Firms will need flexibility while stressing a strong work ethic to their new employees. The on-the-job training is vital as each company runs their business differently. To keep new employees engaged, the firm should assign challenging projects and offer more benefits, such as paternity and maternity leave.
Since millennials focus on giving back, financial advising firms should consider allowing new employees and interns to head community projects sponsored by the company. This investment in time and money can lead to productive and motivated employees.
What Advisers Suggest
The experts from the panel recommend starting children early in the world of investing. Preteens and teenagers ages 12 through 14 can learn to take risks by investing a small amount. By the time these children reach adulthood, they’ll understand and appreciate the role of an accountant or financial adviser and seek professional help.
When seeking help confirm that you are hiring a legitimate accountant or adviser by asking for the individual’s qualifications. An analyst associated with a professional organization will follow conduct guidelines.
Whether you’re new to accounting or a seasoned professional, it’s crucial to network with other professionals, consider getting involved in organizations for certifications and continuing your education to stay on top of the industry’s ever-changing technology.
Anum Yoon is the founder of millennial money blog, Current on Currency. She is a finance/business writer and consultant.