UK accountancy practices can unlock growth potential and remain competitive by transitioning to advisory/consultancy services, possessing the right skillsets, and developing tailored solutions for clients
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The accounting industry has seen significant changes in recent years, with clients’ needs and expectations evolving beyond traditional compliance services. In response to this, accountancy practices in the UK are increasingly diversifying their service offerings and focusing on providing advisory and consultancy services.
According to Accountancy Ages’ latest 50+50 report, published in partnership with Modulr, consultancy fee income across the UK’s top 100 firms grew by a momentous 169% in 2022 from £1.3 billion to £3.5 billion.
“The days of just being an accountant have been and gone, and we are now moving from being a trusted accountant to a trusted advisor,” says William Payne, CEO for London and the Southeast at Azets.
The shift in demand towards advisory/consultancy services in the accounting industry has been driven by various factors, including the need for businesses to become more strategic and proactive in their decision-making. The growing complexity of regulations, competition, and the economic landscape has made it difficult for businesses to navigate and make informed decisions on their own.
James Gilbey, Head of Financial Advisory Services at Mazars says its advisory and consultancy services have grown rapidly, both in the volume and size of clients, as well as the breadth of service they offer.
“We are seeing an increase around regulatory compliance, technology, and digital services. There is also an increased demand around transaction related issues and sustainability advice,” he says.
Accountancy practices have a significant opportunity to offer advisory/consultancy services to their clients, enabling them to differentiate themselves from competitors, diversify their revenue streams, and strengthen client relationships.
However, offering advisory/consultancy services requires specific skillsets beyond traditional accounting expertise. Accountancy practices must possess strong business acumen, industry knowledge, communication skills, and analytical capabilities. These skills are necessary to provide clients with strategic guidance on their operations and help them achieve their business objectives.
One of the biggest challenges for accountancy practices transitioning to advisory/consultancy services is recruiting and training staff with the necessary skills. Firms may need to restructure their workforce, invest in staff training and development programs, or hire experienced consultants to build a team capable of delivering advisory/consultancy services.
“Our team members are provided with a range of professional qualification options that help them go over and above the traditional accountancy routes,” says Mazars’ Gilbey. “We also have a dedicated training programme for our advisory services and have regular ‘teach ins’ where one team will share their specialist expertise with other parts of the business.”
To successfully transition to offering advisory/consultancy services, accountancy practices must also define their value proposition and develop a clear message around the services they provide. The firm’s approach to offering these services must be based on the client’s needs and provide a tailored solution.
Firms can also look to build strategic partnerships with other professional service providers, such as lawyers or marketing agencies, to complement their service offerings and provide more value to their clients.
“We bring accounting and financial reporting expertise to many of our clients in the context of advisory services, but where required we bring in the expertise from across our teams of either sector or service experts, many of whom will not be accountants as they specialise in other areas,” says Gilbey.
Many accounting firms in the UK have already made the transition to offering advisory/consultancy services, and they have seen significant benefits as a result. These benefits include increased client retention and acquisition, diversified revenue streams, and stronger client relationships.
For example, Deloitte UK’s Financial Advisory Services business has grown significantly in recent years, with an increase in revenue by 25% from 2017 to 2019. The growth was driven by the demand for restructuring and insolvency services, corporate finance advice, and transaction services.
The potential for growth in offering advisory/consultancy services is significant, and accountancy practices in the UK should consider this opportunity to remain competitive and continue to provide added value to their clients.
