What is Strategic Advisory?
Strategic advisory is an advisory service offered by banks, financial institutions or other organisations providing consulting services to their clients. Strategic advisers offer operational support, risk management, strategic insight and other strategic services that are needed to ensure the continued success of the organisation. Advisers help clients with decision-making across multiple initiatives and processes. They may also provide financial valuation of companies for mergers/acquisitions or other reasons.
A strategic advisory firm can be called upon to provide advice on how to improve mergers and acquisitions (M&A) during the process. The most common position that strategic advisory firms take in this process is to be your board of directors for this project. They are the most common player in M&A because most companies believe that they know how to run their own company better than anyone else. These boards are there to help set strategy, make tough decisions, negotiate transactions and oversee all other aspects during the project. Most strategic advisory firms are generalists, meaning that they do not focus on one practice area (e.g. finance). Many of these firms are hiring people with MBAs to run this project, while some firms are large enough to bring in specialized M&A consultants from expert marketplaces such as Fintalent on an as-needed basis.
The second most common position that advisory firms take is to act as your financial advisors (e.g. accountants, lawyers and bankers). Their primary goal is to make sure that you strike the right deal while helping you navigate your way through M&A. The companies they deal with either need growth capital, guidance on how to improve cash flow, or want to raise capital in the public markets.
Another position that strategic advisory firms take is to act as your investment counselors. The companies they deal with need a merger and acquisition strategy in order to grow after a life cycle event.
The last position that a strategic advisory firm can take is to help you achieve the right merger and acquisition results for any specific goal or focus area. This can be one of the most effective ways for a company to merge or acquire without hiring their own M&A team. This involves “outsourcing” the top professionals from different functional areas such as accounting, Risk management, cyber security, data analytics and more. This can be a “Multi-Source” M&A. This usually requires a collaborative effort because each company needs specialized assistance from different professionals within their firm. Since this project is a complex undertaking, the firms that provide assistance will need to work together for several months before being able to complete the transaction.
The size of a strategic advisory firm will have an impact on how comfortable you will feel working with them as your advisor throughout the project. In general, larger firms tend to take more care in choosing a team as they see themselves as connecting strategic leaders from different functional areas to work together towards one common goal – successfully integrating companies for growth and success. In contrast, the charges for a larger firm are usually higher than a smaller firm. This is because most larger firms have a top-heavy budget that requires a lot of leverage to efficiently function. Often times the value that you receive from a smaller firm is just as good, if not better, than its larger counterparts. This is because small companies tend to run leaner and have less bureaucracy when compared with their larger counterparts. Their effective cost structure means more profits for their shareholders.
In order to select the right strategic advisory firm for your specific needs, it is essential to know what you expect from this process in advance so that they can be clear about it from day one. Whatever your needs and requirements are, Fintalent’s Freelance Consultants can meet all of your strategic advisory needs. Fintalent’s pool of tier-1 Strategy consultants will bring in their wealth of experience to bear on your business endeavour and help you attain all of your business goals.