John Mellows, senior partner at Mazars Neville Russell, launched a tough criticism of the consolidator model claiming the ‘strategy presets some serious issues for the profession’.
Meanwhile, Julian Synett, managing partner at Levy Gee and chief operating officer at Numerica Group, one of the latest consolidators to declare, said it would be ‘good for clients and good for the people who serve them. It should also be good for investors.’
In recent weeks both Levy Gee and BKR Haines Watts have both declared their intentions to become consolidators joining the Tenon Group which has already become the number 15 firm in the country with fee income of £58.5m.
But John Mellows believes there might be critical problems associated with the growth in consolidators.
‘Independence and objectivity are all important to a profession that operates in such a heavily regulated environment.
‘The pressure of responding to the wishes of shareholders nurtures neither. Even where no conflicts of interest arise, perception is everything to the client.’
Levy Gee’s Synett has thrown his weight behind the consolidator. He said the business environment had changed and that accountants could no longer exist ‘without all the attendant risks of the corporate sector, and crucially with few of the upside wealth creating opportunities’.
According to Synett a consolidation vehicle provides access to capital.
He said: ‘It promises a properly resourced environment that facilitates investment in services, in people, and in technology. Moreover, it equates opportunity with risk for partners and staff through wider share ownership coupled with the sort of capital incentives that are the performance drivers for many in the corporate sector today.’
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