Jessica Fino 14 Mar 2017 04:58pm

Big Four firms' consultancy services to benefit from Brexit

The UK consulting market grew four times faster than the economy last year thanks to the uncertainty caused by Brexit, and the Big Four firms are set to be the biggest winners

According to Source Global Research, 82% of the 440 senior clients of consulting firms expected to turn to the four biggest accountancy firms for answers to their Brexit worries.

The same research found that the consulting market was worth £7bn in 2016, up 7.5% from one year earlier. The largest sector for consultants was financial services, worth £2.3bn, followed by the public sector (£1.3bn).

The report cited "one consultant", who argued that PwC, Deloitte, EY and KPMG will “make hay out of Brexit” because of the number of trade agreements that will have to be negotiated.

Fiona Czerniawska, director of Source Global Research said, “The aftermath of Brexit put the consulting market on pause, as everyone took a step back to assess the implications. But still, the constantly evolving picture is making it hard for both clients and consultants to be confident about what the impact will be.

“We can be certain that a post-Article 50 world will feel very different from one industry to the next; clients in financial services have a number of concerns ranging from passporting to regulation, while the relative value of the pound will be of concern to retailers - all of which could generate considerable demand for consulting services.”

The report said that smaller and mid-sized firms were taking a “wait-and-see approach” before Article 50 is triggered. However, large firms have started establishing themselves as Brexit experts ahead of the opportunities they expect will roll in once the formal path to Brexit begins.

The consulting research company explained that big firms were being more aggressive because they were the most likely to have clients counting on them for answers.

Financial services firms were among the most anxious, the report added, specifically with regard to passporting rights.

Nigel Slater of KPMG said, “For banks, the obvious issue is passporting, with everyone trying to work out how best to continue their existing businesses with the minimum amount of impact to top growth plans and customer service.”

As a result, decisions around passporting are expected to have a big impact on whether institutions are required to move people and assets, meaning consulting support is likely to increase.

Source Global Research said that clients will be “willing to throw their chequebooks at consulting arms” in order to get things done quickly.

In fact, 77% of them said they believe their spend on consultants will increase this year, with 32% thinking their spend will increase more than 20%.

Moreover, 79% of clients believe that they will increase investment in consulting help to support digital technology work, with 77% planning to invest more in data and analytics.

Consequently, the financial services industry is expected to grow 8% this year, the report said.

It emerged last year that government spending on consultants and temporary staff had risen by between £400m and £600m over the last four years, at a time when departments were reducing their permanent workforce. The amount paid in consultancy work totalled up to £1.3bn in 2015.