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 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 M&A 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.
When companies find themselves in financial difficulties, they commonly turn to crisis & recovery advisors.
ISF help them with getting a grip on the crisis situation (short term) and subsequently ensuring a turnaround plan is in place for the longer term.
Key services include insolvency (or bankruptcy) management (consultants are often called in as administrators), restructuring, turnaround advisory and debt management. Risk management consultants help organisations with ensuring that uncertainty in the enterprise and market does not impact (or minimally impacts) business goals.
Main offerings are, among others,
- risk management (analyzing risks and ensuring a process and governance is in place to mitigate risks)
- risk control (setting up the right warning systems that can detect risks)
- internal audit (assessments aimed at mapping risk profiles and compliance) and
- IT risk; which covers the growing risks in the information technology arena such as cyber-security, digital governance and enterprise data management.
The tax advisory segment centers around helping enterprises adhere with tax law, which includes propositions such as corporate tax strategy, location advisory, transfer pricing and tax aligned supply chains.
Accounting advisory focuses on supporting clients with optimizing the accounting and financial reporting challenges facing their businesses and the finance function.
Projects typically entail boosting the efficiency of the accounting function, improving financial reporting quality and flows, and ensuring compliance to regulatory requirements at all levels, from International Financial Reporting Standards (IFRS) to local legislation.
The real estate advisory segment supports clients with financial matters in the area of real estate and property management.
Key offerings include
- location advisory
- real estate valuations
- transaction support on property deals and
- optimizing real estate asset portfolios (often in combination with financial asset management).
Clients typically span four stakeholders types:
- governments and local municipalities (i.e. area development),
- housing corporations (i.e. strategic supply management, risk management),
- companies (portfolio management, location support) and
- real estate investors (i.e. due diligence, portfolio analyses).
The forensics & litigation segment supports clients with a range of services that follow from actual or anticipated disputes or litigation cases.
- dispute advisory
- forensic accounting services (which combines accounting, auditing and investigative skills)
- litigation support and electronic discovery (or e-discovery).
Work can range across industries and topics – a forensic consultant (also known as an auditor or investigative auditor) can
- deliver economic damage calculations for governments
- antitrust bodies or companies
- support tax fraud and money-laundering investigations
- or even look into digital crimes such as cyber-attacks or data theft.
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 M&A 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 M&A 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.