Top firms seeking acquisition strategy, Macquarie finds

Macquarie Group’s 2018 Accounting and Financial Services Benchmarking Report found that 34 per cent of the high-performing firms in the survey – referred to as ‘benchmark firms’ – had plans to acquire another practice in 2017.

By comparison, 23 per cent of all firms in the survey had similar plans of acquisition in the same year.

In terms of plans from firms to buy a client base, the figure was much closer, with 36 per cent of benchmark firms planning to buy a client base in 2017, compared with 32 per cent of all firms.

Macquarie noted that, in response to the demand from firms to buy client bases, the new FASEA education standards coming into effect in 2019 may increase the supply of practices for sale, as a number of advisers may choose not to complete additional education requirements.

“Benchmark firms stood out for their greater appetite for purchasing entire practices, rather than just a client base. This approach is frequently driven by a desire to expand the firm’s service offering or extend its geographical footprint, bringing new people and new systems into the practice,” the report said.

“This can create integration challenges that only well-prepared firms can tackle confidently, by bringing in fresh ideas and new capabilities.”

The report also found that 96 per cent of firms agreed that the role of the adviser is changing.

Of those firms, around a third (33 per cent) thought the firm of the future would have a higher proportion of client-facing staff with technology as a support, while another third (33 per cent) said it will be based on a centralised relationship model within a multi-disciplinary practice.

The remaining 29 per cent believed the firm of the future will be a specialist practice with connections to other advisers.

“Breaking down those findings, two-thirds believed the firm of the future would be strongly focused on clients, while a third believed it would succeed through technical specialisation,” the report said.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].