Advisory Service Line at the Big Four Firms
Advisory services form the last quarter of the Big Four firm revenue and includes the broader non-Audit and non-Tax services such as Transaction Advisory, Risk Management, and Business Consulting services; and demarcations generally vary across the firms.
Owing to this catch-all, Advisory services have been one of the fastest growers in the Big Four firms as the firms extend their services beyond assurance and taxation through penetration into current clients or through referrals from other firms who may be conflicted out at their clients. Advisory services have generally increased their share of revenues.
In 2004, they had 22% of total revenues and this had sharply increased to 31% in 2011, at the expense of declines in Audit and Tax.
Despite this sharp growth, Advisory services had the sharpest decline of 9% from 2008 to 2009, as clients slowed down transaction and restructuring activities all over the world. But Advisory had the sharpest bounce back among service lines, with revenues up 6% from 2009 to 2010, as equity markets roared back, M&A increased and client demand for consulting grew proportionately.
Deloitte’s Advisory revenues grew a remarkable 12%, KPMG was up 8% and E&Y and PwC also grew but at more modest rates.