Three trends affecting valuation within firms

January 23, 2019

business man looking out window

The valuation practice area is experiencing significant changes affecting business valuation services as well as the firms that offer them. How are firms navigating these changes? In this article, three CPAs who specialize in valuation services offer a first-hand look at some of the issues driving a dramatic evolution in this growing field.   

1. Preparing a new generation of valuation talent. With some baby boom leaders in the profession heading toward retirement, there is an emphasis on preparing the next generation to take over their roles. This transition can be complicated in such a highly specialized area. “I am focused on getting two next gen professionals ready to take on litigation cases, testify in court and get to know and be known by the local legal community,” says Keith Meyers, CPA, ABV, CFF, shareholder at Perkins & Co in Portland, Oregon. “The attorneys who will be hiring us must be comfortable with my team’s mastery of these key competencies.” And since most disputes end up in mediation or settlement before trial, it can be challenging to get younger professionals the necessary experience in the courtroom so that they can become competent professionals, he reports.

2. Keeping pace with new client opportunities affects how firms stay competitive in today’s talent marketplace. Competition in the marketplace has been driven in part by new opportunities on two fronts, says Klein. First, baby boomer clients are passing along or selling their businesses. “We’re seeing a huge transfer of wealth among second- and third-generation businesses.” In addition, cross-border business acquisitions have increased because of the globalization of world markets. In each case, firms are seeing an increase in demand.

Firms interested in capitalizing on these opportunities need resources. To meet the need for talent, more and more firms are recruiting student interns in a variety of areas including valuation, says Randie Dial, CPA, ABV, CFF, managing principal of office, CLA in Indianapolis. “We have a chance to see their work, evaluate their soft skills, and they get the chance to get to know us. After this process, we then can potentially offer them full-time jobs when they graduate.”

With client demands increasing, competitive skillsets help distinguish one professional from another—to firms’ benefit. “In valuation, CPAs face competition from professionals with majors in finance, accounting or other business disciplines who are doing valuation work at non-CPA firms, like investment banks or litigation services boutiques,” says Hubert Klein, CPA, ABV, CFF, CGMA, partner in forensic, litigation and valuation services at EisnerAmper in Iselin, New Jersey. In today’s talent market, in-demand professionals have unlimited employment options, pointing again to the need for firms to tap a broader talent pool. Klein’s own practice has a mix of professionals with or without the CPA credential, some of whom may hold a variety of different valuation designations. To provide the services the market demands, “we are looking for good, analytical people with professional skepticism,” Klein says.  

3. Making the most of ABVs’ training and background. The ABV credential requires extensive expertise that holders can use to help clients with a variety of matters, Dial notes. “ABVs have a core base of knowledge that establishes a foundation other than just ‘valuation,’” he says. “I have found personally that having tax knowledge, succession planning knowledge and other key facets have helped me as an ABV to offer service outside just the traditional valuation realm and help be a ‘business partner’ with clients. I think ABVs going forward will be in demand not just for valuation related strategies, but also as more trusted advisors on business issues in general based on their education, knowledge and relationships with clients and partners.”

Whether your firm is feeling the external forces driving an increase in business valuation clients, or you’re looking to boost opportunities for firm staff, the ABV credential provides the credibility and training to help your practice succeed. Learn more about what the ABV can do for your firm.