Permanent eyes off small accounting firms
Permanentmanaging director Paul Lahiff has linked the acquisition of small accounting firm W&D Partners to its increased exposure to private clients, while hinting that two more similar acquisitions are in the pipeline.
Permanent recently announced its 2000-01 financial year profit of $4.1 million which was an increase of $200,000 on the profit for the year before. But more significantly, the company claimed that in the last two years it had achieved a better balance between its corporate and private clients.
“Two years ago we relied heavily on operating revenue from our corporate clients business with contributions of 79 per cent compared to private clients of 16 per cent,” Lahiff says.
“Today we have a more balanced operating base with the corporate clients and private clients business contributing 59 per cent and 37 per cent respectively.”
Part of the move towards more private client business being written by Permanent has been driven by its acquisition of Parramatta-based accounting firm, W&D Partners, which has completed its first full year in the Permanent fold.
“With the acquisition of W&D we picked up a very good source of new customers which increased our private client numbers by about 20 to 25 per cent,” Lahiff says.
He adds that Permanent has been so happy with the fit and the way W&D Partners has driven new business into the financial services group that it is currently in talks with two more similarly sized accounting firms which are close to joining the group.
But Lahiff says these acquisitions are nothing like those typical of large accounting consolidator groups.
“We’re not in the business of large scale acquisitions like the consolidators are,” he says.
“While we view acquisitions as a sound strategy to increase our client base, we remain very selective and will pursue only those firms that fit both our strategic and financial models. These disciplines are the key to being successful in acquiring businesses in today’s environment.”
Lahiff also attributes new private client business to word of mouth, seminars and limited advertising. As well as increasing the private client list, the company has spent considerable time in educating its private clients about other products the group has on offer.
He says they have private clients in the hundreds, and a team of six financial planners with Permanent. Permanent currently has $63 billion under advice, including funds from its corporate clients.
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