A Macquarie report suggests that despite industry changes, a majority of accounting and financial services firms are optimistic about the future and performing strongly.
According to Macquarie's inaugural 2015/16 Accounting and Financial Services Benchmarking Report, which surveyed 355 small to mid-tier firms nationally, businesses are evolving to meet changing regulatory requirements and client expectations.
This has resulted in strong profits and low client turnover, said David Clatworthy, division director for Macquarie Wealth Management.
"Customer retention, new technologies and the retention of key staff are critical for diving profitability," he said.
"We're seeing a variation on how firms believe they can best service clients and drive revenue from adjacent services. For some, this means looking to business models that embrace a more holistic advice offering, while others are choosing to specialise in order to set themselves apart," Mr Clatworthy said.
According to the report, 91 per cent of firms said greater client referrals and improved income per client are the main revenue drivers for their businesses
Meanwhile, 79 per cent of high-profit firms said that adding value to existing customers is "the most effective strategy to improve profitability".
"A long term focus means many firms are embracing a multidisciplinary business model, and adding new services to increase their ability to provide better value to their clients," Mr Clatworthy said.
"Investing in quality staff is also essential to building a stronger client value proposition and relationship, with almost half of respondents (44 per cent) saying the retention of quality key staff is an important strategy for driving profitability."
Looking to the future, 83 per cent of accounting and financial services firms said they are positive about their business' prospects, the report said.
"Over the next 12 months, all businesses say they will focus on attracting new, ideal clients. While smaller firms are focused on regulatory changes and are three times more likely to feel impacted by changes in this space, 41 per cent of larger firms say integrating technology is a key challenge and will look to better use it to boost efficiency and attract and retain staff," Mr Clatworthy said.
"Successful accounting and financial services firms are seeing the opportunity in an evolving market, clearly defining their value proposition to clients and adjusting their business model accordingly," he concluded.
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