The Accounting and Financial Services Benchmarking Report looked specifically at the key trends among firms earning above average profits, and at how they approach their business.
Importantly, the report found that high-performing firms are “significantly more effective” at driving growth and profitability through leveraging the capabilities within their business, and value-adding with existing clients.
“Nearly 80 per cent of high-performing businesses say adding value to their existing client base is the most effective profitability lever they have in the current market. In comparison, firms achieving below average profit are most likely to look outside their business for profitability growth, with 50 per cent reporting new client acquisition as a key profitability driver, compared to 32 per cent of high performers,” said David Clatworthy, division director for Macquarie Wealth Management.
“By doing more with the resources and client base they already have inside their business for growth, high-performing firms are focusing on creating value that will both drive referrals from existing clients and grow revenue per client. These practices have spent more time understanding their clients’ needs and in turn have introduced additional services, resulting in a higher proportion of multidisciplinary clients,” he said.
“This ultimately means high performers are leveraging the factors they have greater control over, allowing them to provide better value to clients and flexibility to adapt to and make the most of market conditions,” he said.
High performers also differentiate themselves by their focus on improving the technologies they use and retaining quality staff.
Fifty-seven per cent of high-profit firms rate retaining quality staff as one of their key strategies for profit performance, compared to 35 per cent of businesses with below average profit.
While all firms reported that the service and expertise they deliver are what clients value most, higher-performing businesses believe their clients are also likely to focus on the expertise and capability side of the equation.
“In an evolving industry, it will be critical for businesses of all shapes and sizes to position themselves strongly for growth. Accounting and financial services firms need to look at ways to ensure they are continuously innovating to meet the opportunities and challenges ahead,” Mr Clatworthy said.