Big Four Lead 9% Growth in Consulting Market

The U.S. market for consulting services grew by 9% to over $50 billion last year, with the Big Four accounting firms being the principal beneficiaries, a new report has found.

Big Four firms posted growth of 12.8% to $17.5 billion, largely as a result of their acquisition strategies, according to the report from Source Information Services. In the U.S. market alone, more than a quarter of consulting acquisitions in the last 27 months involved accounting firms.

“The big firms have been doing a lot of buying the last few years, especially the Big 4,” Source senior editor B.J. Richards told Compliance Week. “That leads to growth in size, but the Big 4 also are well positioned in many ways to take advantage of a sudden jolt in interest in financial management and risk, particularly cyber risk.”
 

Overall, the growth in demand for risk, financial, and technical consulting services is being driven by an improved economy, growth in digitization and cyber security concerns, Source said.

Financial management and risk grew by 11.8% to $16.2 billion in 2014, while technology was up 8.9% to $12.7 billion. More than three-quarters of U.S. clients (76%) said their spend on technology will increase over the next 18 months.

“The dollar is strong, unemployment is down, oil prices are low,” Richards explained. “There’s been more to boost confidence than upset things. As companies are making that recovery, now they are returning to confidence and there’s a lot of pent-up demand.”

According to the report, risk-reward contracts, where consulting fees are aligned to project outcomes, are striking a chord with value-conscious U.S. clients. As one senior accounting firm consultant told Source, “We think that 40 percent of volume in the U.S. in 2020 will be some form of outcome-based fees.”

“To relieve price pressure, we do more value-based billing,” added Ken Hutt, a principal at Deloitte. “It’s probably easier for us to offer that as a big firm. We’re able to make the economics better for the client until they are able to see the impact.

read more: http://ww2.cfo.com/accounting/2015/06/big-four-lead-9-growth-consulting-market/

Big Four drives growth in consulting industry

The consulting sector grew by 8.4% in 2014, driven by double digit growth in the Big Four accountancy firms

Figures released today by the Management Consultancies Association (MCA) show that the sector has “outpaced” growth in the economy. Members of the MCA – which represent 60% of the industry - grew by 8.4% to a total worth of over £5.2bn in 2014. Overall, the consultancy arms of EY, Deloitte, KPMG and PwC grew by 10.75%.

 

Digital consultancy grew by over 27% to a worth of £1.4bn, and is the largest overall element of consultancies, the MCA said. Digital consulting activity is largely focused on the financial services , retail and energy sectors and covers advice on big data, the cloud, social media, gamification, mobile and artificial intelligence.

 

Respondents to the MCA survey said they expected "no let up" in demand for digital consultancy as much of the work done to date has only “scratched the surface”. Consultants expect to see many more firms using digital right across their businesses.

 

According to the MCA however consultants are wary of the instability that could be caused by the international climate, particularly the lingering question marks over Britain’s place in Europe.

 

Paul Connolly, director of the MCA said, “Among our interviewees there was no enthusiasm at all for withdrawal from the world’s largest market place, which is also one of the sources of the specialist skills the UK needs to continue to grow.

- See more at: http://economia.icaew.com/news/june-2015/big-four-drives-growth-in-consulting-industry

Good news on jobs sends average rate for 30-year mortgages above 4%

The average interest rate that lenders offered on 30-year home loans shot back above 4% this week for the first time since November, pushed by news of a strengthening economy.

Freddie Mac’s widely followed weekly survey, released early Thursday, showed the 30-year mortgage at an average interest rate of 4.04%, up from 3.87% a week ago.

The average for a 15-year mortgage rose from 3.08% to 3.25%, and the start rate for an adjustable-rate loan with a fixed rate for the first five years was 3.01%, up from 2.96%.

The rates rose as investors, reacting to a robust report on jobs, dumped conservative government bond investments and piled into stocks, with the Dow Jones and other indexes adding well over 1% on Wednesday. The Dow, Nasdaq and S&P 500 indexes continued to rise Thursday morning.

Mortgages tend to track the yield on the benchmark 10-year Treasury security, which has risen from a recent low of 2.1% in late May to nearly 2.5% on Wednesday.

Investors require higher interest rates on government and mortgage bonds as demand for fixed-income securities wanes and expectations for inflation rise.  

The trend is pulling mortgage rates along with it.

“Markets are responding to strong employment data,” Freddie Mac deputy chief economist Len Kiefer said in announcing the weekly survey.

“In May, the U.S. economy added 280,000 jobs,” he said. “Moreover, job openings surged to 5.4 million in April, up over 20% from a year ago.”

The survey asks lenders each Monday through Wednesday morning about the terms they are offering to solid borrowers seeking mortgages of up to $417,000 that conform to the guidelines of Freddie Mac and Fannie Mae, the nation's major mortgage financing companies.

read more: http://www.latimes.com/business/la-fi-re-freddie-mac-mortgage-rates-20150611-story.html

Reverse mortgages worth a look, if approached with caution

LOS ANGELES - Even as regulators are firing shots at reverse mortgages for what they consider deceptive advertising, financial planners are taking a new look at these loans as a way to avoid selling stocks.

New research suggests the products may actually be worth a look if one can tune out the possibly shady sales tactics.

Reverse mortgages allow homeowners aged 62 and above to borrow against their home equity, and to receive either a lump sum, a series of monthly checks or a line of credit that can be tapped as needed. The debt does not have to be repaid until the borrower leaves the home by selling it, moving out or dying.

Philadelphia has proved a popular place for reverse mortgages, ranking at the top for the number of such mortgages awarded since 2011, according to an analysis of Federal Housing Administration data for The Associated Press by Reverse Market Insight, a California-based company. The city, where many families have lived in the same close-knit neighborhoods for decades, was followed by Los Angeles, Washington and Chicago in 2014.

The Consumer Financial Protection Bureau slammed industry advertising earlier this week, saying it misled people about the risks and costs of such loans. Older homeowners in the bureau's focus groups "were generally confused" by the ads, director Richard Cordray told a news conference.

The ads gave people the impression that a reverse mortgage is "a risk-free government benefit" rather than a loan with fees and compounding interest that increases the balances owed over time, he said. Reverse mortgages typically are insured by the federal government but are made and serviced by for-profit private lenders.

Cordray also took aim at ads that feature celebrity endorsers such as Henry Winkler, Robert Wagner and former U.S. Senator Fred Thompson, without mentioning them by name.

"These well-known actors, even a former senator, add a false air of credibility to the products," Cordray said.

read more: http://www.phillyvoice.com/reverse-mortgages-worth-look-if-approached-caution/

Should Your Consulting Firm Be Specialized?

n the past, specializing could be risky for consulting firms. Consider the limits a pre-Internet consultant would be placing on their potential clients. The firm would’ve been hard to find, making it difficult to serve their client base.
But now, with global reach, finding clients has less to do with geography and more to do with fitting clients’ needs.
Because specialization helps your consulting firm match specific needs, it also makes it easier to target your marketing efforts. By narrowing the audience you’re trying to reach, your advertising and marketing can address issues specific to a given industry, professional role, or region.
When your target demographic searches for solutions, they will be much more likely to find you – and general consulting firms will appear less equipped to solve their problems.
There are definite benefits to specialization. How do you decide your firm’s focus?

 

First, determine the kind of specialization you’d best be suited for. There are five categories:

1. Industry specialization.

Consider the prior experience within your firm. In what industries do your consultants have the most knowledge and insights into? Choosing a growing industry that your firm is well suited to serve can be a powerful boost to your business.
It’s best to select a stable, growing industry—and it’s crucial to keep up with trends and technology in your chosen field, so that you avoid the pitfalls of obsolescence.

2. Service type specialization.

Many services transcend industry, such as strategic planning or social media consulting. By leveraging expertise in a specific service, you can build deep credibility in your area. This is particularly true when focusing on a new or complex service that few businesses have mastered.

Read more at http://www.business2community.com/marketing/should-your-consulting-firm-be-specialized-01238211

Diligence urged for homeowners seeking reverse mortgages

The image of a smiling 70-year-old woman fixing lunch in her kitchen flashes across the television screen.

An announcer with a baritone voice says the woman is happily living off tax-free income, with no mortgage and the luxury of staying in her home for the rest of her life.

“And, you could do the same,” the announcer says, his voice rising with enthusiasm, “with a reverse mortgage.”

The claims are appealing:

“It’s safe” (if done right)

“It’s inexpensive” (in some cases)

“It’s simple” (not at all)

“You can leave the house to your heirs” (yes, but …)

Questions and Answers

Lenders and senior advocacy groups agree that a federally insured reverse mortgage, known as a Home Equity Conversion Mortgage (HECM), can be a advantageous for some seniors.

New rules imposed by the Federal Housing Administration earlier this year mean more protection for seniors, but the onus remains on the borrower to work with a reputable lender and counselor.

Both the FHA and the National Council on Aging have detailed information about reverse mortgages.

Locally, Nova Home Loans reverse mortgage manager Glen Smart is one of only 104 certified reverse mortgage professionals in the country and one of four in Arizona.

Richard Hunter is a HUD-certified reverse mortgage counselor with Old Pueblo Housing Development Inc., the only reverse-mortgage counseling agency in Tucson approved by HUD.

The following Q&A is based on research and interviews with those sources.

While there are other Internet-based financial lenders who offer a different type of reverse mortgage, the following information refers only to the federally insured loan.

Q. What is a reverse mortgage?

A. The federal program known as Home Equity Conversion Mortgage is for homeowners ages 62 and older. It allows borrowers to access the equity in their homes without making a monthly mortgage payment.

Q. What if one spouse is younger than 62?

A. The loan will be based on the age of the youngest person in the home. He or she may continue to live in the home if the other spouse dies but will no longer receive payments from the reverse mortgage.

Q. Who owns the home if there’s a reverse mortgage taken out?

A. As with traditional financing, the homeowner is the owner. The home is pledged as collateral on the loan.

A. How much can be borrowed?

Q. The loan amount will be based on the age of the youngest borrower and the value of the home, minus finance and insurance fees and a set-aside equity reserve.

Q. Who is charging the fees?

A. Third-party fees include appraiser, escrows, title company, legal fees and county recorder. The federal government receives the insurance fees, which are pooled by HUD and make up the pot of money used to insure the loan in the event that there is more owed than value of the home at the time of the loan’s termination.

see more at  http://tucson.com/business/local/diligence-urged-for-homeowners-seeking-reverse-mortgages/article_75e26169-87f2-5413-9624-e7a24f334609.html