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The Pyramid of Advisory Services - where are you? | AccountingWEB | Image of the pyramids of Giza

The pyramid of advisory services – where are you and how to reach the next step?


In the third of our articles in association with Capitalise, Kirsty McGregor looks at "the pyramid of advisory services" and asks advisers where they'd place themselves, along with practical advice on how to improve the advisory services you offer.

28th Sep 2021
Chairman The Corporate Finance Network
In association with
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The pandemic has shone a spotlight on the truly comprehensive role that accountants can play in their clients’ businesses when asked, and for many, also in their lives in general, as we turned our hand to answering queries on a much wider range of topics than normal.

As might have been expected, businesses reached out to their advisers to enquire about the availability of grants and funding, but also about human resources, issues around managing premises and even in some cases, where to source PPE or how to swiftly move to digitalising their working practices. We know some conversations turned to more emotionally challenging subjects too, such as managing stress or illness in themselves, their families or colleagues.

The resultant impact on the profession could be that more firms use this experience as a launchpad to power up even more valuable advisory work, knowing they have the respect from their clients to deliver it and added confidence about the extent of their own teams’ true capabilities.

However, other firms may drift back to only prioritising their compliance work, especially if they are unsure about which direction to go in next.

Which firm are you likely to be?

Moving to the next level

There has been a natural progression of services across the accountancy profession in the last decade where ambitious firms have expanded their service offering and 'non-recurring' or 'special' work has become more normalised under the term of 'advisory' and is now mainstream.

We know that firms have varying success rates with this rollout, usually dependent upon whether they have tied in their marketing and operational strategies to form a holistic approach across the whole practice.

Recognising where you are on the pyramid of advisory services will allow you to consider what strategies you need to adopt next.

Let’s consider the pyramid and how you can score your firm’s development so far.

The pyramid of advisory services

Capitalise - the advisory pyramid - AccountingWEB - image of Capitalise's advisory pyramid concept starting with technical advice, moving onto business advice, capital advice and finallycorporate finance.

We can define our different levels of advice according to clients’ needs as they naturally develop and become more successful.

Making a difference

Realistically, not all clients will reach the top of the pyramid as the diversity of human nature means that the ambition of some business owners will be limited. Those determined to remain small enough so they can manage a lifestyle business are unlikely to be willing to take risks which are usually necessary in order to scale, or to increase their value sufficiently to aim to achieve a successful exit.

Thankfully, some entrepreneurs are natural risk-takers and will absorb all the possible advice you can give them, emboldening and empowering them along the way. These are exciting clients to work with and those firms with marketing strategies to target this group will find that they can easily succeed when offering a full range of advisory services.

However, the most successful firms will be able to take the vast majority of business owners and provide them with confidence and skills to extend their aims and achieve more than they initially thought possible. Those advisers will make the most difference to their clients and be truly valued as a result.

Demand in the current market

Despite the pandemic, the international accountancy network UHY reported that there were 726,000 new businesses created in the UK in 2020 and 636,000 in 2019, showing that the potential startup market for accountants to service continues to grow.

The adoption of cloud accounting also grew during the pandemic as Xero UK reported an increase of 17% in the number of its subscribers to 31 March 2021. Support around software, apps and tech stack is unlikely to abate for many years yet.

With research from Sage showing that 52% of UK adults still dream about starting their own business post-Covid, but 53% of those feel that money worries are stopping them from turning the idea into a reality, potential business owners often lack the skills to access sufficient funding. Advisers who can promote that they offer a capital advisory service will be more likely to attract these knowledge-hungry businesses.

At the other end of the business lifecycle, the mergers and acquisitions market is still breaking all records after its temporary slump in 2020 Q2. Experian Market IQ M&A report for 2021 H1 states that “Private equity buy-outs were at record levels, management buy-outs hit their highest figure in more than a decade and a booming IPO market saw more companies list on the London markets in the first six months of 2021 than during the whole of 2020”.

CEO and managing director of Baker Tilly Canada Corporate Finance, Mike McIsaac describes how they are seeing the global market for purchasers being turned on its head as previously family deals and management buyouts accounted for around 75% of their activity, but now trade/investor-backed deals are dominating.

He believes this is as an increasing number of business owners are reaching retirement age but are less likely to want to hand over the stresses of running a company to those they know and care for. McIsaac also explains how cross-border deals at lower valuations are now more possible as digital tools for target research, due diligence and understanding local regulatory/tax regimes bring deal costs down to acceptable levels for acquisitive companies. Savvy accounting firms will definitely see the advantages of introducing corporate finance to their service offering in this climate.

Successful rollouts

As with any growth strategy for your firm, if you wish to move up the pyramid of advisory services, having a plan will assist you in making any rollout a rousing success.

Consider these areas:

  • Allocating sufficient resources to the launch
  • Upskilling your team
  • Creating marketing messages
  • Adopting proven business development processes
  • Having appropriate systems to ensure operations are smooth
  • Promoting success stories

After introducing Capital Advisory services to thousands of accountants, Capitalise have become experts in recommending the most successful approach and have created a playbook to guide firms through onboarding it throughout the firm, foundation steps, initial launch to clients and continued promotion of the new service.

This article was brought to you by Time with your clients is a precious opportunity - make a good impression with conversation starters from our advisory insights platform. Find out more about how to start those conversations with our capital as a business advisory service guide

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