On the mid tier accountancy firms
For some years I have been convinced that the mid tier market of the accountancy profession would undergo a similar consolidation to that which has affected the current Big Five.
Further globalisation of the marketplace coupled with rapid technological change has meant that entrepreneurial businesses now demand a higher level of service from their traditional advisers.
With the need for clear focus, strong brand identity and the capacity to invest in new products and services, I believe we will see the emergence, from the present proliferation of medium-sized firms, of a very small number of key national players.
These firms will need the structure and scale to make investments on a national basis and an effective international capability specifically focussed on the needs of entrepreneurial business.
There are some in the profession who have questioned the approach and impact of the American-style consolidators.
However, I am doubtful that a distinct business, comprising of small independent firms, can be successfully pieced together and made to operate under one national framework.
Our proposed merger with HLB Kidsons, which will give us an annual turnover of approximately £230m and around 4,000 people in our integrated national firm, accelerates the consolidation of the middle market and reflects our intention to further strengthen our leadership.
Before further rationalisation of the sector can occur, I believe firms will have to address their market focus as well as their national firm structures.
The commonality of approach to these crucial matters was a significant factor in the decision to seek a merger between Grant Thornton and HLB Kidsons.
It will be interesting to see how other firms will react to the changes taking place.