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The fallout of the royal commission has prompted growth in PwC’s financial services arm, but a “national surge” in demand for tax advice is also behind the big four’s results for FY17.
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Tax advice still core despite financial services gains, PwC says
01 August 2018
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PwC Australia has delivered a 10.8 per cent revenue growth to $2.35 billion for the 12 months to 30 June this year, edging out last year’s results of a 10.4 per cent growth.
PwC chief executive Luke Sayers attributed the growth to “unsurprisingly strong” demand from the financial services sector amidst the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“Our Financial Assurance business had a second consecutive year of very strong revenue growth, with our Risk Assurance business achieving 20 per cent growth for the third year in a row - a reflection of the market demand for broader trust services,” said Mr Sayers.
“Our Australian Consulting business had an outstanding year with People & Org and Risk Consulting both delivering 27 per cent revenue growth, Business & Performance Consulting achieving 17 per cent revenue growth and Strategy& 19 per cent revenue growth.”
The firm’s financial advisory business also posted strong results, with tax accounting for an 11 per cent growth, deals business at 17 per cent growth and legal business seeing a 30 per cent growth.
“Some of the significant factors behind PwC’s exceptionally strong double digit growth in tax services include a national surge in the demand for indirect, corporate and global tax advice as well as continued strong growth in employment tax advice,” a spokesperson told Accountants Daily.
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Growth in PwC’s legal business was for FY17 was less than half of the 68 per cent enjoyed in FY16, which the big four firm puts down to a natural slowdown from an “extreme growth” phase. It has since added a further 11 partners, taking the total number of partners in the legal practice to 40.
PwC’s acquisition of PPB Advisory did not contribute to the FY18 results, with the deal set to be completed today.
Further, Mr Sayers believes there will be several factors, including the impact of the royal commission, that will drive market demand.
“If geopolitical risk remains volatile, the implications for Australia could be significant. Businesses need to have operating models and strategies that are highly flexible, enabling them to move quickly to respond to unexpected shocks,” said Mr Sayers.
“Locally, the government will be focused on working with the states to get the NEG in place and we are yet to see where the long overdue corporate tax cuts land.
“The implications and impacts of the Royal Commission are only just beginning, with learnings and insights applicable far beyond the financial services sector.”
PwC recently confirmed it had admitted 85 new partners in 2018, down from its record intake of 91 in 2017.
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