Post-Covid-19, a holistic approach to service provision could be the next step in the evolution of your practice as clients increasingly seek advice across the whole business
This article was first published in the May 2020 UK edition of Accounting and Business magazine.
The financial impact of Covid-19 will be felt for some time to come, and clients are more in need of their accountants’ advice than ever. And as with most consumers, people tend to want to shop for everything in one place. Small business owners, contractors and freelancers tend to opt for all-in, fixed-fee monthly ‘packages’ covering a number of their requirements, such as bookkeeping, accounts and tax returns. But their need for more holistic support is now greater than ever.
Of course, larger clients have larger needs, and bigger firms are equipped to meet them, but should SMPs follow suit and broaden their service offering to include, say, financial planning and capital raising?
One commentator, Mark Lee, suggests it could be an aspiration too far. ‘Medium-sized practices may be able to offer a wider range of services due to the larger number of partners and staff. But smaller ones need to make it clear they cannot advise on areas outside of their expertise. Clients should not expect to be able to get everything under one roof.’
However, with automation and artificial intelligence (AI) continuing to reduce revenues from compliance work, many say it is common sense for practitioners to develop other income streams. ‘It makes complete sense to de-risk by diversifying services,’ says Carl Reader, joint chairman of D&T business advisers and accountants.
One way to do this is to add services within your existing specialism, which also moves your clients closer to the one-stop-shop experience. Reader says: ‘For example, our core market is franchising, so we’ve broadened our services to include franchise funding and franchise resales through our resales business. It was just the obvious next step.’
A more common approach is to expand a generalist service offering to include ancillary services. Yorkshire-based Shenward LLP provides professional advice under the umbrella of tax, business advice, audit and accounts, and payroll. ‘We also offer HR and health and safety services – for example, employment contracts and disputes advice, and visits from health and safety officers to perform risk assessments at clients,’ says managing partner Sherad Dewedi.
He adds: ‘It’s our long-term vision to one day also offer legal, insurance, insolvency, wealth management and financial services, as there are clearly perfect synergies for one-stop shops. For example, we often advise clients on business purchases and sales, meaning we are very much involved during the due diligence and legal process. Would it not be in the client’s best interest if we offered this service ourselves? The client would liaise with a single firm and a single client service partner, rather than shift between two sets of advisers, which is often both inefficient and costly.’
All the Big Four now hold Solicitors Regulation Authority licences and have inhouse legal teams providing a broad portfolio of legal services. ‘They recognise the benefits to their business and clients, and it’s only a matter of time before this filters down the market,’ says Dewedi.
Diversification, however, is not without its risks. ‘Failing in the additional service can jeopardise the whole relationship with the client,’ says Reader. ‘You need to ensure you have got the requisite skills and expertise, either inhouse or via a partnership with other professional advisers.’
Reader believes that if a practice can afford it, it should hire the expertise inhouse. ‘This allows you to ensure that the client experience levels are matched across every service line, and reduces the risk of the other provider taking the client elsewhere. For many practices, however, outsourcing would be the only option, particularly in the early days.’
North-east based practice MHA Tait Walker offers accountancy, advisory and wealth management services. Mark Parkinson, partner in the wealth management team, says that the firm’s integrated approach ‘fills a gap in the market’ and that there’s a clear alignment between tax advisers and financial planners in terms of maximising a client’s wealth. ‘Many wealth management decisions are closely linked to taxes, so by having the firm’s financial planners and tax advisers working together adds to the likelihood that clients achieve better results.’
He adds: ‘There’s certainly demand for what we offer, as it’s becoming increasingly complicated for clients, with a whole host of financial products – LISAs, ISAs and pensions – to think about. Also, the impact of coronavirus and Brexit on pensions and investments is difficult to predict, so we must help our clients focus on the long term.’
Smaller practices usually team up with other professional advisers. ‘At present, we have external partners in place (for provision of legal, wealth management, insurance and insolvency services) who we work closely with so that clients have the experience of getting a one-stop-shop service,’ Dewedi says.
He explains: ‘We often charge a global fee for the entire service, including ancillary services provided on a subcontract basis. Clients liaise with one key point of contact for the entire process. For example, in the case of a client’s voluntary liquidation, we complete the first stages of the process, arrange three-way meetings with the client, us and the liquidator, and the communication between all parties is channelled through us – we mediate between the other two parties.’
Lee believes buying in expertise from other professional advisers as and when needed is the way to go (he established Tax Advice Network to enable general practice accountants to access specialist tax advice when required).
‘It will become far more common for accountants to be collaborating with lawyers, tax and financial advisers as clients increasingly choose such options rather than those who work in silos.’
Iwona Tokc-Wilde, journalist
"Failing in the additional service can jeopardise the whole relationship with the client. You need to ensure you have got the requisite skills"