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Identifying the Top 5 Business Challenges for Financial Services Firms

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IIdentifying the Top 5 Business Challenges for Financial Services Firms

Any decision-maker at a CPA firm knows the industry is undergoing a wide range of dramatic changes – and the effects of those changes are hitting all at once to produce a whole new set of major business challenges.
 

At CPA firms across the country, aging baby boomers in senior roles are approaching retirement and driving consolidation. Throughout the marketplace, a pitched battle is underway to secure the top talent. In this demanding and highly competitive environment, the ability to anticipate emerging challenges can spell the difference between the market leaders and the also-rans.

That’s why we set out to better understand the business challenges that will define the future for accounting and financial services firms – to give them a competitive edge.

The Hinge Research Institute surveyed 530 professional services firms of many different industries and firm sizes, as part of an ongoing study of professional services firms and how they grow. Here, respondents were primarily owners and marketing executives.

With this research, we were able to determine not only the business challenges facing professional services firms, but marketing initiatives those firms are undertaking to address their challenges. What’s more, we were able to break down the results to examine industry-specific challenges for accounting and financial services firms – and the results were revealing.

The Top 5 Business Challenges
 

So what were these leading challenges, and what do they mean for firms seeking to remain competitive in today’s demanding marketplace?

1. Attracting & Developing New Business
 

Cited by over 70% of respondents, attracting and developing new business is the top challenge for accounting and financial services firms.

This is in line with a trend across the professional services industries. In many market segments, it’s growing more and more challenging to generate new clients. The competition is fierce.

Specifically, accounting and financial services firms are feeling significant pressure from international competition. In light of significant competitive pressure, organic growth is a critical goal for firms.

2. Finding & Keeping Good People
 

Noted by 51% of respondents, this is a trend we’ve been tracking for some time, and the race for talent is only continuing to heat up. Talent acquisition is becoming a major focus with many firms.

What lies behind this challenge? We’ve already touched on it briefly above: generational change and cyclical labor shortage. As baby boomers retire, it’s increasingly urgent for firms to secure strong talent and plan for the next wave of leaders.

A firm’s brand plays a crucial role in this process, and part of a firm’s brand is its reputation for employing and cultivating leaders. But how do you build that reputation? Consider the next challenge, intimately tied with this one…

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3. Leadership & Internal Change Issues
 

Here again, we see the effects of baby boomers’ mass retirement: this challenge is cited by 33% of respondents. Firms are expending a great deal of energy addressing questions of leadership and internal change.

This plays into the question we raised in the last section: how do you build a reputation for employing and developing leaders? For that matter, how do you develop leaders in the first place?

The answer lies in high-visibility experts. Perhaps you have such experts in your firm already: figures widely recognized in the industry and even beyond for their talents. These well-known professionals, who we call Visible Experts®, boost the perception of your overall brand among both clients and employees.

Our research shows that it’s possible to cultivate Visible Experts® in your firm through a program of consistent, replicable techniques. Consider how a Visible Expert® program may help you develop the next generation of leadership while simultaneously acting as a draw for potential employees who wish to build their reputations.

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4. Technology Issues
 

Over 30% of respondents report technology issues as a top challenge for their firms. This is best understood as the struggle to keep up with evolving technological needs and related client expectations.

Often, common business challenges in an industry double as rich opportunities, and this is just such a case for accounting and financial services firms. For just one example, firms that leverage the power of marketing automation and join it to distinctive expert insights have the opportunity to differentiate themselves. It’s precisely because the field as a whole is struggling with technology that using it successfully can be so effective.

5. Dealing With Client Demands & Expectations
 

Dealing with clients’ demands and expectations represents a high-priority challenge for over 29% of respondents. Clients are expecting stellar service – and more to the point, they’re expecting to have their problems solved. We’ve seen the importance of these expectations in previous research, and it takes a lot of management attention to ensure that clients are satisfied.

One key step for firms to address this challenge is to know which type of client you succeed with best – and develop a program aimed at securing more clients of that sort. Often, success is a matter of well-matched partners.

Conclusion
 

Attracting and developing new clients is a key business driver for CPA firms today. As clients’ needs, buying behaviors, and expectations evolve, firms’ marketing efforts must adapt alongside them. At the same time, these marketing efforts must also focus on attracting and keeping the best talent.

As CPA firms attempt to address all of these challenges, the need for highly strategic, coordinated marketing is greater than ever, and many firms may require expert guidance. The firms that are able to build a nimble and multi-purpose marketing machine will be the ones that compete successfully and grow.

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