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Accountancy firm celebrates 12 deals of Christmas

The East Midlands office of accountancy firm Mazars says it has advised on 12 deals in the run up to Christmas.

The team says it is seeing resilience across the board at entrepreneurial business, acquisitive corporates, banks and private equity investors, despite economic uncertainty.

Mazars Deal Advisory has hired Tom Boss and Jacob Staten in a move which it says reflects the “sustained demand for high quality business advice” in both M&A and due diligence.

The sale of £20m turnover Premier Workplace Services to Hong Kong-based Crown Worldwide took Mazars’ deal completion tally over the last three months to twelve.

Paul Pownall – M&A senior manager – said “Whilst it’s impossible to avoid the ‘B-word’ in the press, the sentiment towards doing deals remains positive, as businesses seek to capitalise on the economic environment.”

Mazars Deal Advisory partner Julian Clough, said “Activity levels are strong; acquisitive corporates have been particularly busy as opportunities emerge to consolidate in fast moving markets. We see this as a continuing trend and feel well positioned to advise clients – new and old – moving into 2019.”

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More than 30 new Tennessee laws set to take effect in 2019

More than 30 new laws in Tennessee are set to go into effect next year with most beginning on New Year’s Day.

One of the laws talks about immigration, specifically sanctuary policies. Starting January 1, state and local governments will not be allowed to adopt sanctuary policies or any similar measures.

Another new law deals with abortions. At the start of the year, ultrasounds will be required prior to getting an abortion. The person giving the ultrasound will also offer opportunities to learn the results.

That will be required if a heartbeat was detected.

Next year will also see an increase to the minimum property damage threshold for motor vehicle accidents to require a written report with the department of safety.

The threshold increased $400 to a $1,500. It’s a hundred dollars more if cases include local or state government property.

A new law will connect Tennessee to the Interstate Medical License Compact, a nationwide streamlined process for physician licensing. This will help give people more access to patient care.

The compact makes it easier to license across state lines without federal regulations. Over 20 states are part of the compact.

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KPMG partners receive bumper payouts despite Carillion fallout

KPMG, the auditing firm that gave Carillion a clean bill of health, has reported a leap in profits that will result in the average pay of its 635 partners soaring from £519,000 to more than £600,000 each.

Only months after KPMG was accused by MPs of being part of a “cosy club” and “complicit” in the run-up to the collapse of the construction and government outsourcing company, the accountancy group reported an 8% rise in revenue to £2.3bn in the 12 months to 30 September. Profits surged 18% to £365m.

Bumper profits helped to boost the pay packets of KPMG’s most senior executives, with the average payout per partner rising to £601,000. The chairman, Bill Michael, who was appointed last year, received £2.1m.

KPMG was one of the firms singled out in a damning report on the demise of Carillion, which collapsed under a mountain of debt in January.

“In its failure to question Carillion’s financial judgments and information, KPMG was complicit in the company’s questionable accounting practices, complacently signing off its directors’ increasingly fantastical figures over its 19-year tenure as Carillion’s auditor,” MPs on the work and pensions and the business select committees concluded in May.

KPMG was also fined £3m in August by the Financial Reporting Council (FRC) after the firm admitted to misconduct in its audits of the fashion chain Ted Baker in 2013 and 2014. That penalty followed a £4.5m fine by the FRC in June, for its audit of Quindell in 2013.

The boost to profits comes at a difficult time for the big four accountancy firms – KPMG, EY, Deloitte and PwC – which have attracted criticism from politicians and regulators over the quality of their audit work and face calls to be broken up.

They were all criticised for failing to spot problems at Carillion sooner and for prioritising profits over proper scrutiny of companies during their audits.

MPs accused the firms of “feasting” on the carcass of Carillion after banking £72m for work in the years leading up to the construction firm’s collapse.

Professional firms such as KPMG have also been criticised for conflicts of interest, given the wide array of work done for big clients such as Carillion. It has been claimed that firms are less willing to challenge auditing clients in the hope of winning lucrative contracts for consultancy and advisory work.

However, KPMG stressed in its latest results that it was the first UK firm to “voluntarily stop providing ‘non-audit’ services to the FTSE 350 companies it audits”. It has also recommended that the ban is rolled out across all audit firms in the UK.

Michael said: “I have been clear that our wider profession faces challenges. In order to safeguard against any perceptions of conflict of interest, we have drawn a clear line between our advisory and audit work for UK-listed businesses.”

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Brexit has already created 3,500 technology jobs in Brussels

Thousands of tech jobs have moved to Brussels from the UK due to Brexit with expectations of more to come once Britain leaves the EU, according to a sector leader.

As many as 3,500 roles have already been relocated to the Belgium capital, said Juan Bossicard, president of Microsoft’s Innovation Centre in the city.

The stream of tech workers leaving the UK began in the summer of 2016, Mr Bossicard told the New Statesman.

“Since Brexit began, 3,500 jobs have moved here from the UK and we expect far more to come after Brexit officially happens,” he said.

Mr Bossicard said Brexit offered a “huge opportunity” for Brussels, and added the city has a lot of offer UK companies, including single market access and good links to other European countries.

Ahead of the EU referendum, job losses linked to Brexit were forecast to be in the hundreds of thousands but since the vote these projections have been curtailed.

However, the Bank of England has said that Britain is set to lose 5,000 financial services jobs by 29 March next year, a prediction backed by the Treasury.

MPs are set to begin debating Theresa May’s Brexit deal, with a vote on the agreement due to take place in the coming days.

On Tuesday, an official at the European Court of Justice said Article 50 could be unilaterally revoked, sending the pound up against the dollar and the euro.

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4 Effective Ways to Win and Retain Clients

Are you walking the walk or just talking the talk? A flashy marketing campaign is doomed to fail if your transparency and genuineness don’t come through to your clients in their interactions with you. Make no mistake: Customers have well-honed radar and will disconnect if they sense even a whiff of disingenuousness.

So, how can you continue to gain new clients and create long-term relationships with them?

James Atkins and Jason Langford-Brown, both longstanding Mindshop members and successful business advisors, delivered four key insights on this topic during the global Mindshop Advisor Workshop this November.

1. Market for Engagement

“Experience is the new product, and time is the new price” was an idea that resonated throughout the workshops.

For professional service firms, providing a fantastic experience for customers across all touch points, from the sales process, onboarding and delivery through to billing, is essential to generating referrals, which remains still the strongest way to generate leads. This is based on the key idea that marketing is no longer the sole responsibility of a few people and clients’ willingness to pay for ease of engagement.

This whole-of-business approach to marketing requires thinking, acting and communicating from the inside out, starting with the organisation’s “why.” Ask yourself some fundamental questions about your purpose, motivation and beliefs. This will frame how you go about engaging with clients: your process, specific actions and your firm’s “what.”

2. Be More Authentic

Balancing what you say versus what others say about you is the key to authentic engagement. An advisory brand is an articulation of who the organisation is, what they believe and what they do. So, if it does not reflect the expectations and experience of your customers, you’re at risk of lacking authenticity. Do you know what clients are saying about you and what your reputation is? If not, you need to find out. Start by asking both customers you have won recently and those you lost.

The sweet spot of authenticity is the intersection of your brand, reputation and fit with customer needs.

To be authentic you need to be trusted, and to be trusted you need to be transparent.

Think of your marketing as a pyramid: The base is your website, holding up campaigns and sales engagement techniques. All these building blocks need to be authentic, aligning with your “why” at each stage of the sales cycle and beyond. Here’s a practical tip: Why not try harnessing the power of video (the shorter the better) and using unscripted language to tell stories of how your customers have experienced success using your services?

3. Engage Through Influence

B2B selling is complex, and the likelihood of a purchase drops sharply when the number of decision makers involved increases. Today’s empowered customers are often well into making their purchase decision by the time they engage a supplier. Therefore, engaging through influencing decision makers can be a powerful tool.

Advisors can implement the seven principles of persuasion to assist in the B2B sales process:

  • Reciprocation: Prospects will have a feeling of obligation if you provide something of value first
  • Social Proof: We tend to be more trusting of things that are popular and have been endorsed as quality by others we trust
  • Commitment and Consistency: Asking your prospect to start with small agreements makes it harder for them to say no in the long run
  • Liking: We’re more likely to submit to requests made by people we like and who like us in return
  • Authority: We’re more likely to agree with those who have perceived authority
  • Scarcity: We’re drawn to things that are hard to get and in short supply
  • Unity: People need to feel they belong to something greater than themselves

These principles are not about “trickery” and need to be applied in an authentic way. How can you weave them into your advisory offering, marketing and sales?​

4. Meet the Marketing Fundamentals

The quality of your service model and ability to deliver a high-value outcome for clients are obviously keys in client retention of clients. If you’re not offering services that provide ongoing benefits, rather than one-off, project-based activities, you will constantly be searching for new clients.

Your offering must meet the following three marketing fundamentals:

  • Be digestible
  • Solve a problem
  • Link to a clear competitive advantage

Your advisory model needs to tell a great story about how you will work with clients to achieve their goals.

Here are three advisory services that will resonate with clients in 2019 and improve your likelihood of retention:

  • a. Online Coaching and Training: Deliver the triple play of benefits: leverage (more clients, more often), improved customer experience (just-in-time support) and cost reduction (less reliance on heavy travel schedules to maintain face-to-face contact).
  • b. Initial Business Reviews: Help clients focus attention on where they are now and where they want to be in the future. Use tools such as a Growth and Profit Diagnostic, Now Where How and financial dashboards.
  • c. Half-Day Strategic Plan Resets: Time-poor clients want a simple, strategic plan review to get them back on track. Use tools like One Page Plan, Now Where How, Sustainable Competitive Advantage, Mindmap and Pareto to achieve a clear plan in a short period of time.

Good luck with implementing some of these ideas! The achievement of authenticity through your marketing, sales and advisory offering will set you apart from those who are just “talking the talk” and help you win new clients and keep them.

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A look at Kentucky’s new Power of Attorney statutes

Kentucky’s Power of Attorney (“POA”) laws just received an update. Effective July 14, 2018, Kentucky adopted portions of the Uniform Power of Attorney Act (2006) drafted by the Uniform Law Commission (“ULC”). Even though Kentucky did not adopt Articles 2 or 3 of the uniform act (which address specific powers granted to the agent and a sample form), the new statutes will provide much needed clarity in replacing our previously sparse statutes.

Generally speaking, a POA is an instrument by which a person (called, the principal) designates another (called, the agent or attorney-in-fact) to deal with the principal’s property and act on the principal’s behalf, either out of necessity or mere convenience. Often, a POA will be designated as “durable,” meaning it remains in effect even after the principal loses the capacity to manage his or her property.

POAs are governed by state law, which can mean that a single instrument can be interpreted in very different ways from one state to the next. The ULC has promoted the adoption of a uniform law across the country in an effort to reduce these potential inconsistencies for principals who move from one state to another or own property in multiple states. According to the ULC, Kentucky will join 26 other states that have already adopted portions of the uniform law, meaning a POA drafted to comply with the new Kentucky law should be interpreted similarly in a majority of states.

Kentucky’s new statutes are located in Chapter 457 of the Kentucky Revised Statutes (the “KY UPOAA”) and they replace KRS 386.093. KRS 386.093 was a bare-bones statute that dealt with only three issues related to POAs: (i) durability, (ii) the default method of determining a principal’s incapacity, and (iii) when an agent is authorized to make gifts of the principal’s property.

On the whole, the new laws adopted in Kentucky will provide substantially more guidance on the drafting, interpretation, and use of POAs than did KRS 386.093. Below are some of the items addressed in the new statutes:

  • Execution. A POA must be signed in the presence of two disinterested witnesses. This is a change from the prior law and uniform act, which do not require any witnesses. In addition, we recommend that the POA is signed before a notary public so it is an acknowledged POA capable of being filed to transfer real estate and for acceptance by a third party discussed below.
  • Durability and Coordination with Guardianship or Conservatorship Proceedings. Under the new act, a POA is durable unless the instrument specifically states otherwise. In addition, a principal may nominate a person for consideration by the court to serve as the principal’s guardian or conservator, if necessary. However, in a break from the uniform act and prior law, the POA terminates upon the appointment of a guardian or conservator unless the court specifically provides that it shall remain in effect.
  • Co-Agents. If a principal designates two or more persons to act co-agents, each co-agent may act independently unless the POA provides otherwise. This is different from the typical rule that require co-agents or co-fiduciaries to act by a majority.
  • Agent compensation. By default, an agent is entitled to reasonable compensation. To the extent the principal does not wish the agent to receive compensation, the principal would need to say so explicitly in the POA.
  • Fiduciary duties. At a minimum, an agent must act in good faith, within the scope of the authority granted to him or her, and in accordance with the principal’s reasonable expectations or best interests. However, a principal may waive certain other duties such as the duty of loyalty and to avoid conflicts of interest, which may not be appropriate when a close family member or personal friend is serving as agent.
  • Acceptance by a Third Party. In response to difficulties some agents face persuading banks, insurance companies, or other institutions to accept an otherwise valid and enforceable POA that may not match up with the institution’s internal policies and procedures, a third party must accept a POA that was acknowledged by a notary or may ask for a certification, translation into English, or opinion of counsel regarding authority granted to the agent in the instrument. However, the third party may not require an additional or different form of POA for authority granted in the POA presented.
  • Gifting. Curiously, unlike its predecessor, the KY UPOAA is entirely silent on whether or under what circumstances an agent has authority to make gifts of the principal’s property, except that the agent shall attempt to preserve the principal’s estate plan including the minimization of taxes. Accordingly, unless a specific grant of authority is included in the POA, it may be unclear whether an agent is authorized to make gifts.

Any POA validly executed in Kentucky prior to July 14, 2018, will continue to be valid under the new law. However, the new act will apply a judicial proceeding concerning a POA commenced on or after July 14, 2018.

Contact a member of SKO’s Trust and Estates practice to discuss how best you can use this opportunity.