Financial Services Acquisition

Specialism amongst advisors

I was reading a survey of Scottish accountancy firms in this months CA Magazine.  What caught my eye was the structure of the market.  As you would expect the big four - E&Y, PWC, KPMG and Deloitte - are at the top in terms of scale and at the smaller end there are lots of small single site operators.  What interested me is the middle market where we operate - mostly comprised of multi site businesses, and often in the process of expanding by acquisition.    I suspect this pattern is replicated south of the border.

This is in marked contrast to the PEM model,  where unusually for a firm of our size we have one location;  Cambridge.   The benefit of this is that one can gather lots of specialists together to give a range of quality advice.   I have never worked for a firm in the other camp; but imagine that each local office must have more of a sub-post office flavour with specialists, if they exist at all, at a distance.  In contrast when issues arise during client meetings and I can call in VAT,  Tax , HR, IT and other specialists immidiately.    I guess on the plus side having a local office might help in marketing to a location.   But in my experience decent businesses of any scale are happy to travel for advice,  or more likely we will go to them.    This is beginning to sound like a commercial, which was not my intention.  Rather it just shows that even in as prosaic a trade as accounting there are some quite different business models.   

The big firms take specialist much much further, with folk specialising by industry, and within much deeper subsets of their specialisms.  In Corporate Finance they might specialise further in MBOs, due diligence, or M&A:  this leads to the pursuit of ever larger deals.  It is a model that works for them - and happily opens up the mid market for more generalist corporate finance advisers such as us.    Don't get me wrong we are specialists.    Just not to such a degree.   Its about balance, and I believe we can bring better all round advice for example by being involved in both buying and selling businesses.   And also the funding and strategy aspects of these deals.   


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