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Mid-tier practices struggling to keep pace, says Deloitte

Industry consolidation is set to heat up as Australia’s mid-tier sector struggles to fund the investment required to compete with larger firms, says Deloitte.

News Michael Masterman 09 April 2015
— 1 minute read

Speaking to AccountantsDaily, Adrian Batty, partner at Deloitte Private, said many mid-tier practices are struggling to find the capital required to invest in technology and attract top quality staff in order to compete with the big four as they progress further into the traditional markets of the mid-tier firms.


This, according to Mr Batty, is driving consolidation in the industry as mid-tier practices look to join larger firms.

“If it was me looking [into] the crystal ball right now, I think there are some real challenges for that middle-tier accounting practice to keep pace with technology and also to keep pace with how to attract and retain talent,” he said.

“When they see a firm like ours competing head to head with them in the marketplace, they choose to come and work with us rather than against us."

Mr Batty said Deloitte’s recent merger with leading Melbourne firm GMK Partners is a great example of a solid firm struggling to progress in the current environment.

“If you listen to what the partnership of that firm talk to, they were really struggling to keep pace with the capex required to actually fund the investment in technology. They were really struggling to attract and retain a number of people in their business.

“They had great growth and great clients but trying to actually find more talented people to support the infrastructure was proving quite difficult.”

Mr Batty said advances in technology have allowed the bigger firms to compete with mid-tier firms on price and enter the traditional mid-tier market.

“The platform we have built with Deloitte Private Connect, that has allowed a firm like us, that is supposedly big four and more expensive, to dismiss that point of view - because it’s completely not true.

“We can actually compete in the marketplaces that were once owned by these small and regional type accounting practices,” Mr Batty said.

Mid-tier practices struggling to keep pace, says Deloitte
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