The recent global events have pushed many sluggish economies to the brink of recession. As a result, the financial consulting industry has also taken a hit, with estimated losses close to $30 billion in the second half of 2020.
The biggest reason behind the reduction in size and revenue of the financial consulting industry is the lack of clients and businesses. As the coronavirus pandemic continues to deepen, many clients are delaying projects, decreasing their scope, or restructuring their priority in business development. This has thus resulted in businesses cancelling extra expenses, such as consulting services and investment projects, which in turn affects the financial consultant landscape.
However, holding back or cancelling on financial services during these difficult times prove to be a wrong move as the benefits that financial consultancy services provide outweigh the expenses, especially during these unprecedented times one spends for these services. As such, financial consultancy services are still very much relevant and should be actively engaged rather than being dropped from the business plan during this tough time.
What is Consulting in the Financial Sector?
Before delving into what is a business consultant in the financial sector, we first need to establish that consulting in the financial sector is not the same as financial consulting. The latter refers to the provision of personal advisory services on topics such as how to invest money, how to make a retirement plan, and many more. While the former usually means a variety of financial consultancy services is provided to a company according to their specific needs and goals. These business consultants usually work for a business or a finance consultancy, and their clients usually comprise of companies.
Even though the term ‘financial consultant’ is a somewhat antiquated term that’s largely been replaced by the term ‘financial advisor’, there is still a slight difference between the two terms, especially in the financial sector. The former usually are more qualified than the latter where they are equipped with proper licenses. They also have more financial planning experience and extensive knowledge in almost all facets of the financial services, such as budgeting, taxation, forecasting, allocation of assets, tools, and products than the latter.
In short, consultants in the financial sector are licensed experts who provide personalised financial consulting services and advice that can assist companies in identifying and overcoming challenges, increasing revenue as well as providing financial expertise in a specific market. They usually make available their clients a continuum of financial services, including management of cash flow, company incorporation, investment, and business planning, tax, and insurance planning, as well as risk management.
As such, financial consultancy services are very much still relevant in times of uncertainty and hardship as they can help businesses to make educated financial decisions to weather through the storms and stay on their course.
Advantages of Engaging Financial Consultancy Services
Besides providing a range of financial services that are beneficial to businesses, financial consultants also have many other advantages that outweighs the cost one spends on engaging their financial consultancy services. Figure 1 illustrates the benefits.
In today’s connected world, investors and business owners are bombarded with a vast variety of financial information. This has posed as a challenge as investors and business owners have to sort through all the information to get to the right information that they needed.
Moreover, there are a variety of complex investment products, regulations, theories, and concepts emerging every year, making it hard for investors and business owners to constantly be educated of the recent trend in the financial industry.
As such, the role of financial consultants is essentially to help investors and business owners to filter through all the information, extract and reorganise the useful and relevant information that is most beneficial for the business and advice the clients accordingly. Thus, financial consultancy services remain relevant even in times of crisis for their knowledge and relevant services.
Time and Cost Efficiency
Besides that, financial management requires a proper and in-depth understanding of the financial markets, the continuous study of the change in market trends the businesses’ financial capabilities, and the current situation of the business to stay on top of the trend. In order to achieve that, investors and business owners will need to spend a considerable amount of time and cost.
As such, it is better to engage external financial consultancy services as they are proved to be both time and cost-efficient. Financial consultancy firms usually consist of a team of professionals to manage one’s investment portfolio within an acceptable range of cost. This will in turn allows business owners to direct their attention to more fruitful and productive activities rather than spending valuable time and money on the tedious and time-consuming job that can be better performed by the experts.
Another advantage of engaging financial consultants is the objectivity that the consultants provide in terms of decision making. In times of crisis, many investors and business owners tend to make emotional decisions or hasty investment decisions.
As such, the role of financial consultants is essential especially in times of crisis, as they help clients to see their blind spots. Also, financial consultants can provide an emotion-free analysis of one’s financial situation and help to ensure that he or she is well-informed to establish positive and objective investment decisions.
In short, financial consultants act as a protector of the business from poor or misleading advice that has no back research as well as mismanagement of finances. Thus, financial consultancy services remain relevant even in times of crisis for their objectivity and expertise.
Keeping Up with The Changing Times
As the world enters the digital age, the financial industry has also evolved to stay afloat in the competitive consumer landscape. The emergence of the FinTech industry has also allowed alternative financial consultants, such as Robo-advisors and online financial planning services, to emerge as well.
Unlike traditional financial consultants, both Robo advisors and online financial planning services tap on the advancement of technology and providing inexpensive portfolio and investment management online. They also offer a variety of financial planning services and tools through the use of online platforms, making financial consultancy services more accessible to clients.
However, Robo advisors and online financial planning services are still facing many restrictions when it comes to providing more comprehensive and complicated financial planning. As such, traditional financial consultancy services are still much preferred by many investors and business owners.
Consult with Desfran Now
Financial consultancy services continue to be relevant, especially during the current crisis caused by the coronavirus pandemic. However, the type of financial consultancy services one receives depends on the financial consultant one engages. The most beneficial kind of financial consultancy services will be a hybrid model that combines the desirable aspects from both the human advisor and virtual financial consultants that will assist in solving the problems faced by the investors and business owners.
To understand how your business may benefit from financial consultancy services, it is best to engage established business consultancy experts like Desfran. Spearheaded by one of the world’s leading management teams, our team of seasoned experts stationed in more than five cities across the globe, dedicated to providing regulatory compliance solutions across different jurisdictions.
As a partner who grows with your business, Desfran provides a suite of business solutions which includes new market entry consultancy services, new market requirements like business incorporation and registration, bank account opening, marketing services and regulatory compliance, all of which can all be fulfilled through Desfran’s bespoke solutions. We continuously stay on top of trends and movements in the financial industry to help your business grow by identifying, maximising your business potential while providing comprehensive customised solutions.