Small advice firms seeking mergers with accountancy firms

Struggling small advice firms are increasingly seeking to merge with mid-tier accountancy and advice firms to broaden their potential revenue streams, according to Prosperity Advisers chief executive Allan McKeown.

Prosperity, an accounting and financial planning firm with more than 150 staff and offices in Sydney, Brisbane and Newcastle, has merged with three smaller businesses, the most recent in October 2008, he said.

“We’re receiving some approaches from owner-operators in small advice firms who are looking to get the benefits of broader income streams in difficult times.

“We can offer their client base quite a diverse range of income sources that would help cushion the falling revenues they are experiencing in their sole financial planning channel.

“Accounting advice, mortgage and lending advice, [self-managed super fund] administration, estate planning and salary packaging are among these potential revenue streams,” McKeown said.

In return, he said Prosperity is “not looking to be an exit plan for retiring advisers but, rather, is seeking those with something to offer over the long run”.

Prosperity is also experiencing increasing applications for advice and accountancy positions from the ranks of newly retrenched staff at the big four accountancy firms.

“We’ve been able to pick up some highly skilled new staff as a result of the larger accountancy firms having reduced staff and ceasing hiring in the economic downturn," he said.