Just 46% of clients say they get more in value than they pay in fees from their tax advisorsTechnology companies could put intense pressure on tax advisory firms if they don’t get to grips with the innovation problem
Although the US tax advisory market expanded by 9% to US$8bn in 2017 – a new report today finds that tax advisory firms need to provide more innovative solutions and deliver more value to clients.
The Perceptions of Tax Firms report, from the leading research and strategy firm for the global professional services industry, Source Global Research, found that while 81% of clients rate the quality of tax advisors’ works as ‘high’ or ‘very high’, just 46% say they get more in value than they pay in fees.
Clients also place a great deal of importance in receiving cutting-edge thinking from their tax advisors, but the Source research found that they are left wanting: They don’t see thought leadership or innovative approaches as a relative strength of the tax advisory firms they know.
The report warns that if tax advisors don’t get to grips with this problem, there is a possibility that software providers and technology companies could start competing strongly with tax firms to provide automated solutions and platforms to manage tax for clients.
Martin White, a Senior Analyst at Source Global Research, said:
“In an age of ever-increasing digitisation, the desire from clients for innovation indicates that they want to see more automation, use of data & analytics, and other digital solutions from their tax advisors. Clients may also want to see more managed services, allowing them to reduce the number of routine, manual processes within internal tax functions.”
The report says that one of the ways of improving perceptions about the quality of thought leadership and the innovative approaches of tax advisors could be to partner with more innovative areas of the firm, particularly where firms have wider consulting and audit practices. The report found that some tax advisory firms have had success putting their technology partners at the centre when approaching clients who want to focus on innovation – allowing them to show how advanced their thinking is, and to demonstrate their track record of applying innovative approaches in consulting, audit, or other areas of their business.
Closing the value gap
When it comes to views on value from clients, the report found that the most value-adding tax firms are much better when it comes to the strengths of their people – with the top firms better at matching the right people to the right projects, and providing a blend of better sector-specific expertise and experienced subject matter experts. The quality of their thought leadership and the way they deal with stakeholders is also better.
Martin White from Source concluded:
“Better people can help clients think and work better, can allow clients to do things more safely – by providing an external view on internal thinking – or can use their knowledge, experience, and expertise to do things faster than a company could manage with just in-house resources.
Given the importance placed by clients on the quality of thought leadership, we think this is the most crucial people area for firms to focus on in order to improve perceptions of value.”
For more information on Source reports contact email@example.com, telephone +44 (0)20 3478 1204, or visit www.sourceglobalresearch.com.