Accountants come out on top as preferred source of financial advice for SMEs
New research which was released today reveals that, in the UK, small firms trust their accountants more than their bank managers when it comes to seeking financial advice, with the majority admitting to seeking such advice fewer than four times per year.
The study, conducted by credit risk management company Graydon UK and business support organisation the Forum of Private Business (FPB), questioned 400 small businesses on their individual experiences of seeking financial advice. The results reveal that 70 per cent of those questioned choose to consult their accountants for this type of advice, compared to only 47 per cent who look to their bank managers as trusted advisers.
The data also indicates that only 20 per cent of owners and managers of small firms admit to seeking financial advice quarterly or more frequently. When asked what prompts them to seek professional financial advice, 68 per cent of respondents replied “only when I think it is necessary”. This dragging of feet and apparent lack of planning could spell trouble for many of the UK’s small firms, whose delays in seeking financial advice may be too little, too late.
Worryingly, 36 per cent of those surveyed admitted that they have not met with their accountants or bank managers in the last year, with one in four (24 per cent) putting this absence of contact down to either a lack of faith in their advisers’ knowledge of their businesses or the fact that they have received poor advice in the past.
Martin Williams, Managing Director of Graydon UK commented: “The traditional ‘grey-haired pillar of society’ stereotype of the bank manager as a trusted and respected source of financial advice has faded into the past. But as the economy hits upon hard times and banks become increasingly nervous about credit limits, SMEs need now, more than ever, to maintain a close dialogue with their bank managers.”
“We certainly do not want a repeat of the last recession, when the relationship between banks and small businesses broke down completely.”
The FPB’s Chief Executive, Phil Orford, added: “An issue that has not been reported as widely as lending restrictions is the declining level of service being offered by the banks. There is an increasing trend of established relationship managers being replaced by individuals in call centres, which leads to the loss of long-standing and profitable business banking relationships.
“In light of these changes, it is not surprising that more small-business-owners are turning to trusted accountants rather than their bank managers when seeking financial advice. However, it is a concern that they are not sourcing help more frequently, particularly in these testing times. A return to previous levels of service – which means good working relationships between bank managers and business-owners – would allow banks to manage risk more effectively and provide the appropriate access to finance to those that need it.”
On a more positive note, nearly one in three firms surveyed (29 per cent) said that they are seeking more financial advice now than they were a year ago, with 37 per cent expecting that they will need to take more advice over the year ahead.
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For further information contact:
Stephen Finch / Matthew Warlow
Weber Shandwick Financial
Phone: 020 7067 0705 / 020 7067 0712
Email: firstname.lastname@example.org / email@example.com
Forum of Private Business
Phone: 01565 626 019 / 07775 756312
Graydon UK Limited
Phone: 020 8515 1400
Notes to Editors:
About Graydon UK
Graydon UK is one of the leading database information providers specialising in company credit checks and risk assessed marketing lists as well as providing instant online credit checking. The company helps clients reduce the uncertainty of doing business by providing a complete, differentiated and high-quality package of credit risk management services. Graydon provides access to credit information and reports on companies in more than 130 countries worldwide. The Graydon group is owned by Atradius, Coface and Euler Hermes, three of Europe's leading credit insurance organisations. www.graydon.co.uk
About the Forum of Private Business
The Forum of Private Business (FPB) was formed in 1977 and fights on behalf of private businesses. The FPB represents approximately 25,000 UK-based businesses, which in turn employ in excess of 600,000 people.
The FPB also provides a range of business services aimed at increasing member efficiency and profitability. Visit www.fpb.org.
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