Mid-tier accounting network set to disband
One mid-tier network, known for its SMSF services, has announced its federation of firms is to be disbanded.
Hayes Knight founder Greg Hayes made the announcement yesterday, citing a fractured business model and a misalignment of strategy.
“It was clear that the strategic alignment between the offices was not consistent, and rather than limp along, we have taken the brand back to its foundations, and we will build it out from there,” said Mr Hayes.
As part of the decision, Mr Hayes added that in conjunction with the firm’s ASX-listed company Easton Investments, the Hayes Knight brand will begin taking a minority interest in high-quality firms throughout Australia to align culture, capital and participation.
“What we are doing is positioning a brand in the mid-tier market that will be sustainable and leverageable,” he explained.
Mr Hayes noted that the federation business model, widely used in mid-tier professional services firms, is fractured and has led to a “continual revolving door” of firms moving from brand to brand.
“No federation today would sit secure in the view that none of their members are likely to defect to an alternate brand, and every federation would have members being approached by other brands,” said Mr Hayes.
“In my view, culture alone does not provide the necessary glue to sustain a federation of firms – you also need capital and participation,” he added.
“The ability to differentiate at a brand level and apply capital and marketing focus to key services is severely limited. Ultimately, every office does their own thing.”
As reported last week, Hayes Knight South Australia and Northern Territory will join the Moore Stephens Network from 1 April.