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The rise of mid-tier firms

Grant Thornton

Grant Thornton’s heritage dates back to 1904, with the formation of UK firm Thornton, Webb and Co, which merged with Baker and Co in 1959. Following a global formation with 49 other firms, American firm Alexander Grant, and Thornton, Webb were brought together, the firm renamed Grant Thornton in 1986.

The firm specialises in audit, and works alongside large companies, mid-market clients and public services clients – public sector, not for profit and wider civil society organisations.

The firm is currently the fifth largest in the UK, with revenue for the year ending 30 June 2018 of £490m, with audit taking up 32% of revenue at £157m a small rise on the previous year.

David Munton, audit partner said: “Our brand with our mid-market clients has never been stronger, adding more clients in 2017/18 than in any previous year. We see a great opportunity to continue to grow at speed in this market segment. ”

BDO

BDO was founded in 1963 as Binder Seidman International when firms from the UK, Netherlands, Germany, the US and Canada partnered, later adopting the name BDO in 1973. It merged with Binder Hamlyn in 1988 and Stoy Hayward in 1994 forming BDO Stoy Hayward, the new firm became the UK member firm of BDO International.

BDO has been the sixth largest firm in the UK for the past 15 years, recently merged with Moore Stephens giving it gross annual revenue of £590m, and pushing the firm into fifth place. It was recently appointed as auditor of investment company AJ Bell, which had dropped KPMG after 10 years.

In its 2018 accounts, underlying revenues increased by 8.5% to £464.1m compared with the previous year. The audit business posted revenue of £164.6m, which equalled 9.2% year-on-year growth.

In its results, the company cited the reasons for its success as its “entrepreneurially-spirited client base being resilient and hungry for growth despite economic uncertainty, great people and, finally, its focus on quality”.

RSM

RSM launched in 1964, and began as a small network that was originally called DRM. The organisation restructured in 1993, changing its name to RSM International. The name originates from the original founding member firms of the organisation, Robson Rhodes, Salustro Reydel and McGladrey. The largest member firms are RSM US, formerly known as McGladrey, and RSM UK, formerly Baker Tilly LLP.

RSM provides services ranging from accountancy and business advisory services in both private and public sector. It reported revenue of £314m in 2018, in line with the results from last year, with audit accounting for around a quarter of overall revenue at £77.7m.

At the time RSM stated: “The board considers that the business is well placed to embrace the challenges that continue to be presented in the market and the delivery of high quality audits, at sensible commercial rates, will continue as we believe that this is the only policy which is in the best long-term interests of the partnership and our clients.”

Smith and Williamson

Smith and Williamson was formed in 1881 in Glasgow, the first London office was opened in 1893. The first merger was with NCL Limited, an investment manager, in 2002. Its second merger was with Solomon Hare, a private accounting firm in the UK, in 2005. In 2018 Smith and Williamson merged with LHM Casey McGrath in Dublin.

The firm deals with clients in relation to accountancy, tax and financial advisory services, and currently has 12 offices in the UK and Ireland employing over 1,700 people.

Smith and Williamson are currently the eighth biggest firm in the UK, recording a 4.3% rise in revenue to £278.1m in 2018, profit after tax also shot up by 13.2% to £40.3m.

Andrew Sykes, non-executive chairman on publishing of the results said: “While markets face short-term uncertainties and regulatory pressures will inevitably continue, our commitment to client service remains paramount. This commitment, and our robust and distinctive business model, give us confidence in the group’s potential for continued growth.”

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