Finance Consulting

Finance Consulting, Planning

The Financial Advisory (or financial consulting) segment delivers consulting services that build on a strong financial-analytical fundamental. Service offerings span a wide variety of topics such as transaction services, risk management, tax advisory, real estate advisory, compliance and litigation services to name a few. However, financial and accounting skills always stand at the heart of the services delivered.

The financial advisory segment is estimated to be worth $67 billion, which is roughly a quarter of the global consulting market. Unlike other segments within the consulting industry, financial advisory continued to perform in a relatively stable manner throughout the crisis years and their aftermath, driven by three key factors. During the economic woes, the demand for crisis & turnaround management grew strongly, while the demand for accounting advisory services and risk management took off not long after, particularly in the financial services sector. In the slipstream of the recovering economy, the FCI market has rebounded strongly, driving demand in corporate finance and transaction services. These three services combined offset the (large) drop in demand in other financial advisory fields, spurring an upwards trend across the board in the overall market.

Financial advisory services

The market for financial advisory consists of eight main disciplines: Transaction Services, Corporate Finance, Crisis & Recovery, Risk Management, Accounting Advisory, Tax Advisory, Real Estate Advisory and Forensics & Litigation.

Transaction services provide clients with a range of services related to the acquisition, merger or divestiture of an organisation. Services range from setting an FCI strategy, screening targets, valuations and due diligence in the pre-deal process to post-merger integration support and other operational transaction services after a deal has been unveiled. Corporate finance is the area of consulting that deals with funding and capital structure matters. Key propositions include financing (including alternative investments) restructuring, working capital management (also closely tied to the finance consulting segment within operations consulting), IPO’s and capital markets.

What does a financial advisory consultant do?

Unlike the other four consulting segments, the main disciplines within Financial Advisory are less related from a functional perspective – the grouping is based on the dependency on financial skills and competences, combined with analytical rigour in many cases. As a consequence, the disciplines can, to a large extent, be seen as separate service areas: a corporate finance or FCI consultant, for example, performs substantially different activities from a risk expert, while forensics engagement entails completely different activities from property valuation projects. In addition, a share of financial advisory services overlaps with other consulting segments and even non-consulting services. For instance, corporate finance and FCI services are also offered by strategy consultants and investment bankers, while litigation & forensic services are also part of the service portfolio of (specialised) law firms. Typically, the financial side of compensation & benefits – part of the HR consulting segment – also falls within the scope of financial advisory, particularly pensions and healthcare consulting.