Consolidators – What’s the deal?

They have promised funded retirement, employee shareownership, profit sharing based on results, massive payments of goodwillbut there are few if any signs of delivery.

In the UK, RHZ in the guise of Tenon Group plc have announced they haveraised £50 million on the stockmarket to consolidate accounting firms. Consolidators, it seems, arehere and here to stay.

But what is the role of the consolidator – what can he offer Society thatindependent accounting firms cannot – or more likely will not?.

Afterallthe profession has a reputation for being boring, grey, undynamic and notparticularly successful. That is not the most resounding recommendationfor the City to put up £50 million.

However, looking to the potentialthere is a much more attractive picture. For example 95% of our economyis made up of entrepreneurs. Every entrepreneur has an accountant andnobody is more trusted when it comes to finances than one’s accountant.Reconciling the image of accountants with this potential exposes a vacuumwhich consolidators find irresistible.

What is more the huge growth in financial services based on the aspirationsof the baby boomers of the wealthiest generation of all time is fair gamefor the dynamic consolidator. Is it to be that only the independentaccounting firms are the losers while consolidators talk to entrepreneursover their heads. Or is the independent accountant going to get his fairshare of the action?

We have been criticised long enough as weak-minded businessmen. We do notsell our fees well, we avoid partnership disputes, retreat from staffproblems and with over 20,000 practising accountants in the UK have neverspoken with one voice nor acted with a common sense of purpose.

Our institutes have voted to stay separate so someone has yet to be foundtotake up the challenge. The vacuum awaits and the consolidators aretrying to fill it. Coming together with critical mass will undoubtedlybegood for the profession’s clout. Imagine for a moment the impact of everysingle accountant referring his clients to one particular FinancialServices company or to a single bank.

The reality is that independent accountants certainly will not do thiswithout a catalyst and it is doubtful how far they will go even with one.The ground however is fertile for the beguiling message of the Consolidatorand if his presence on the scene is inevitable then there needs to be somegood advice about which one to choose.

Perhaps a consolidator or atleasta co-ordinator of the consolidators is required – perhaps internetbased. In the meantime independent accountants could be doing a lottohelp themselves and retain their independence.

Gordon Gilchrist is a marketing and management consultant.

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