Financial Consulting Firms – Roles, Responsibilities, Types, And More

The year 2021 saw a 15.2% market growth in the Indian Financial Consulting Industry. The main reason was the heavy jolt most industries got due to the Covid pandemic. By the beginning of the year 2022, despite the second Covid Crisis, 49% of the Industry was in recovery mode, and nearly 31% of the businesses were working at normal levels which were pre-pandemic. The only main reason behind this success story is that most businesses turning to Financial Consulting firms for strategizing plans. Let’s have a look at the major Financial Consulting Firms, their roles, responsibilities and the top firms In India.

A Brief Overview of the Indian Financial Landscape

Before the year 1990, the Indian Business Industry was mostly dependent on Chartered Accountant Firms and Chartered Accountants to keep book records of their Profit & Loss Statements and Balance Sheets and act as tax advisors. In the year 1990, after economic and commercial liberalization was put into effect, a plethora of domestic and international companies took advantage of the privatization move. Capital inflow from foreign investors and domestic investors not only saw growth in the private sector but also saw the launch of IPOs in the Stock Market. There was a remarkable growth in the GDP of the Indian Economy post-2000. With the growth in the industries, the role of financial consultants was not limited to just book keeping and tax advisory, but a need for data analysis, financial forecasting, tax structuring, strategy planning in all departments, Mergers and Acquisition advice, and many more roles were in demand. Thus, the entry of Financial Consulting Firms In India.

The Financial Consulting Firms In India as an industry are valued at INR 8 billion and are expected to grow to INR 14 billion by 2025, where as the Global Financial Consulting Industry is valued at $ 85.8 billion with an expected growth of $122 billion by 2030, at an average growth rate of 4.5%.

The Roles and Responsibilities of Financial Consulting Firms

Let us begin this section with a short definition of what a Financial Consulting firm is. A Financial Consulting Firm is an institution that offers expert financial opinions on proposed business plans or strategies of a company or to an individual. There are two types of Financial Consulting Firms, first which cater to individuals and advise them on matters of long term financial planning, property related financial decisions, investments, and insurance.

The second type of Financial Consulting Firm caters to businesses, Government Entities, and large corporations.

For the Earlier Mentioned Clients, the Roles of a Financial Consulting Firm Are as Follows:

• Work on long term business resilience to ensure not only the profitability goals of a company are achieved, but also the social, environmental, and economic factors which the company has to keep in check are taken into account.
• Employing various strategies of data analytics to present to the companies the predictions of the future outcomes of the decisions in question and also to suggest a data-driven road map for ensuring maximum risk mitigation.
• To help companies take fact-guided decisions in all their internal restructuring, the introduction of new processes and systems will in turn help increase productivity, reduce overhead costs, and mitigate risks of breakdowns.
• Set up future sales and manpower engagement goals, key performance indicators, and operational effectiveness.
• Streamline the legalities involved in business operations for the management and ensure any legal overlook is considered along with smooth ownership legal processes.
• Assist companies during the process of Mergers and Acquisitions by doing thorough market research, and data analysis of the financials of the client company to ensure an increase in profitability and cash flow of the parent company along with maximum risk mitigation.
• Taking strategic decisions for capital sourcing and investment opportunities in various projects to ensure that the end gain is in allegiance with the organization’s priorities and goals.
• Assist organizations in debt restructuring to ensure that the debt is paid in a manageable way by negotiating with the creditors.
• Ensure smooth transition plans for the companies which involve divesting assets, transfer of ownership, and closing down operations that are causing loss.

Types of Financial Consulting Firms

The Finacial Consulting Firms In India are mainly categorized to the area of expertise. The following are the major types of Financial Consulting firms globally:

Accounting Consultancy:

These consultancies provide expertise in complex financial accounting for the company like lease accounting, revenue recognition, and financial instruments to be put into practice. They impart advice and present plans for implementing new accounting practices. They help in preparing and presentation of the firm’s financial reports. They help in ensuring that the accounting of the firm abides by the different rules and regulations as per the law. To ensure that financial accounting complies with the goals and standards of the company policies, they conduct financial audits periodically.

Risk Consultancy:

Financial Risk Consulting firms study the procedures and processes to discover risks at any given stage, starting from the designing of the product till the final delivery. This also includes supply chain logistics, customer services, and also the service sectors. They point out the vulnerabilities in the procedures and accordingly prioritize the threats and risks to the firm. The second role of importance is planning against heavy financial impacts and any damaging lawsuits. They also assist in implementing the measures, evaluating the outcomes, and improving the plans accordingly. They revise the plan periodically to mitigate the potential risks.

Tax Consultancy:

Tax consulting firms analyze financial and tax-related problems. They research all tax-associated issues of the form and ensure that the client is tax competent. They formulate solutions where the firm has to pay less tax. The entire procedure is done keeping in mind that the client remains compliant with all the tax laws and regulations. Their services cover, corporate and individual tax returns, property taxes, sales taxes, franchise taxes, and all the other estimated taxes.

Financial Crisis and Recovery Consultancy:

Many estimated and many unforeseen crises can hit any firm, these can be natural crises, technological crises, crises due to confrontations, crises due to malevolence, organizational misdeeds crisis, crises due to skewed management values, crises due to deception, management misconduct, crisis and the utmost important crisis due to bankruptcy. A crisis company studies these points of vulnerabilities in any firm and develops holistic crisis management plans to ensure that there is a minimum downtime requirement and that the firm’s assets are protected. They also ensure that all the procedures comply with legal imperatives. They ensure plans for a smooth recovery, fast financial restructuring, and real-time support during the entire crisis period for a faster recovery rate.

Forensic and Litigation Consultancy:

This line of Financial Consultancy deals with the investigation and scrutiny of high-stakes litigations, arbitration, and compliance-related investigations. They conduct internal and external research and analyze complex enterprise data which is related to complex financial transactions. They have expertise in lost profits, financial evaluations, financial malpractices, breach of contracts, financial malpractice, and fraud cases. They also deal with preparing the company for any inquiries by the government or regulatory bodies. They also help in analyzing the financial transactions in companies to mitigate the risk of malpractice and fraud.

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Real Estate Consultancy:

They come into the picture when a firm plans to invest in big-ticket-sized property dealings. They are not similar to real estate agents as their role is only involved in the financial aspect of the property dealings. They research and analyze the cost of construction, the mortgage to be taken on the property, and which banks or lenders to approach for sustainable interest rates. Based on the data they predict the rate of return of the property. They help position the portfolio of the company through financial analytics, modeling, and economic analysis.

Corporate Finance:

The firms specializing in corporate finance consultancy analyze the financial status of the company at all given points. They predict based on data how stable the company is and if the company is prepared for any sudden or estimated pitfalls. They propose and implement models to keep a check on the working capital and maintain the budget of the firm. The data analysis and presentation of the stability of the firm’s capital funds, in the long run, increase the shareholder’s trust in the company. In addition, they also deal in investment management, debt management, and Mergers & acquisitions for the firm.

Transaction Services:

As the title suggests, these Financial Consultancy firms specialize in handling the entire process of any transaction and offer post-merger support for the integration of the clients. The consultancy deals primarily in Mergers and Acquisitions, disinvestments, divestitures, and fundraising management. They conduct complete market research for the company and analyze the operational, financial, and legal aspects of the negotiation. Based on the firm’s business valuation, operations, and assets they notify the firm of any noticeable threats. 

Top 10 Financial Consulting Firms In India

India is fast emerging as a prominent figure on the global map. From startups to established enterprises, all require financial and regulatory consultancies as now they are spreading their wings beyond borders. Financial Consulting Firms In India have not only helped the Indian Business Industry make data driven informed decisions but also have helped in the positive GDP growth. So here is a brief look at the top 10 Financial Consulting Firms In India :

Top Financial Consulting Firms in India

1. Mahindra & Mahindra Financial Services Ltd.

• Background –It has the parentage of the strong Mahindra and Mahindra Group and was established in 1991. At present, it has a strength of 24000 employees with more than 1380 branches all across India
• Awards and Ratings -.It was awarded the best BFSI brand amongst the list of Financial Consultancy Firms in India by the Economic Times.

It started primarily as a financier for vehicle funding. Soon, it changed its focus area to a plethora of different financial products, catering to primarily the Rural, Semi-Urban, and MSMEs segment. Their  portfolio includes the following : 

• Vehicle Funding – The financial construction types of equipment, commercial vehicles, utility vehicles, tractors, and pre-owned vehicles

• SMEs – They offer working capital finance, bill discounting services, equipment finance, and project finance. They offer expertise in Credit and Loan Solutions, Liquidity Solutions, Financial & Risk management Solutions. 

2. HBD Finance Services

• Background –It comes under the parentage of HDFC Bank and was established in the year 2007. It has a strong workforce of more than 17000 employees and has more than 1300 branches all across India.
• Awards and Ratings-  It is accredited with CARE AA and Crisil AAA ratings for its bank facilities and long-term debt loans. It has also been awarded a CRISIL A1+ rating for short-term debts. HBD offers the following Financial Consultancy Solutions : 
• Business – Enterprise Business Loans, Business Loans, Construction Equipment Loans, Commercial Vehicle Loan, Gold Loan, Loan Against Property, Used Car loans, two Wheeler Loan, Car Loan, Loan Against rentals, Loans against Securities, Loans against KVP/NSC, Loans against Bonds
• Personal – Personal Loans, Gold Loans, Vehicle Lonas, Loans against securities, insurance, investment, property, and life insurance, and Doctor Loans

3. Bajaj Finance Services

• Background –  It was established in 2007 and enjoys the parentage of the Bajaj Group. It has more than 50000 employees working. It has 3504 branches in different locations all across India. 
• Awards – It enjoys the highest Domestic Credit Rating of AAA/Stable for long-term debts. It has CRISIL AAA/Stable rating. It has been awarded a BB+ rating for long-term debts and B for short-term debts by the S&P Global Rating Company.

Financial Consultancy Services Offered:

It offers the following services: 

• SME Finance – Home loan, loan against property, gold loan, business loan, loan against shares, professional loan, working capital loan, developer finance, used car finance.
• Corporate Finance – Warehouse financing, 
• Commercial Lending – Vendor financing, large value lease rental discounting, loan against securities, retail finance, E-commerce finance

4. Tata Cleantech Capital Ltd.

• Background The company is a joint venture between Tata Capital Ltd. and International Finance Corporation in the year 2011. It has more than 200 employees. It currently has only 4 branches in India.
• Awards – It has been rated AAA by CRISIL

Financial Consultancy Services Offered:

This is the only Financial Consulting Firm in India that is a member of the network of Green Bank. It offers the following Financial Consultancy services : 

•  Business Project Finance and Debt Solutions
• Debt Syndication Services for Working Capital, Term Loans, and Structured Finance
• Buy and Sell Side Mergers & Acquisition
• Financial Advisory in Capital Structuring, and Valuations 
• Corporate Finance

5. Aditya Birla Finance Ltd.

• Background – The company was established in 2007 and is under the parentage of the Aditya Birla group. It currently employs more than 34000 employees. It has a good network of around 1295 branches.
• Awards – It has been accredited by ICRA AAA rating in long-term credit rating. 

Financial Consultancy Services Offered: 

• Corporate Finance – Project Finance, Structured Finance, Working Capital Finance, and Term Loans
• Mortgage Finance –Loan against Property, Construction Finance, Lease rental Discounting, and Commercial property purchase
• DCM and Loan Syndication 
• Home Finance
• Personal Finance
• SME Finance

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Apart from Indian companies, there are many Financial Consulting Firms in India which have a global presence and global leaders too. Here is a list of the top 5 Financial Consulting

6. Ernst & Young 

• Background – The first office of Ernst and Young India was established in 2015 in Kerala. Ernst and Young are a UK-basedFinancial Consulting Firm that is a market leader with a presence in more than 150 countries. In India, as of 2023, they have more than 3 lac employees working for them. They have 12 branches in India, especially in all the metros and Tier 2 cities
• Awards and Accreditation – It has been accredited with CARE AA /Stable rating for long-term funding and A in short-term funding. It has been voted for the last 25yrs as the best Fortune 500 company to work for.

Financial Consultancy Services Offered:

They offer Financial Consultancy in the following sectors: 

• Corporate Finance
• Divestments
• Mergers & Acquisition Advisory
• Mergers & Acquisition Integration
• Sustainability and ESG Services
• Strategy Consulting
• Modeling, and Valuation 
• Restructuring and Turn around
• Risk Consulting

7.  KPMG 

• Background – The second in the list of prominent Financial Consulting Firms In India, Klynveld Peat Marwick Goerdeler established its first branch in India in the year 1993. It enjoys a workforce of more than 20000 employees in their Indian operations. They have a strong presence in 14 cities in India, including Tier 1 and Tier 2 cities.
• Accreditation and Awards – In the year 2023 KPMG has been recognized as a world leader in Supply Chain, Strategic Finance, Mergers & Acquisition Services.

Financial Consultancy Services Offered:

The company has proven expertise and offers services in the following areas –

• Audit and Assurance
• Tax Advisory
• Redefining Wealth in Business Families
• Asset Management
• Banking and Capital Market Advisory
• Fintech
• Private Equity
• Insurance
• Payments – Core Infrastructure Transformation, Adoption of Digital Channels, New Product Innovation, Compliance Adherence

8. Boston Consulting Group

• Background – BCG was established in 1963 in the US. It was established in India in 1995. It has more than 100 branches in 50+ countries all across the world. It is considered a market leader in the field of business strategy. In India, it has 10 branches in Mumbai, Delhi, Chennai, and Bengaluru. It has an employee strength of more than 5000 in India and more than 30,000 across the world.
• Awards and Ratings – BCG has been awarded in the year 2023 as The Best Firm to Work with amongst the Fortune 500 Companies. It ranks as No.2 for consultancy services amongst the list of Top 50 Vault Consulting Firms. 

Financial Sevices Offered:

Amongst the list of Financial Consulting Firms In India it proves leadership in the following financial areas –

• Business and Organizational Purpose consultancy
• Business Transformation consulting
• Corporate Finance and Strategy
• Mergers & Acquisitions and PMI
• Risk and Compliance Management
• Pricing and Revenue Management

9. Deloitte 

• Background – It was founded in India in 1990 and is counted among the top 4 Financial Consulting Firms In India. It has more than 15000 employees in its 13 branches spread across India. 
• Awards and Ratings – It was awarded the strongest and most valuable commercial services brand by Brand Finance Award in 2022. It is 24th on the list of Fortune 100 best companies to work for. 

Financial Consulting Services Offered: 

• Audit and Assurance Consultancy
• Mergers and Acquisition and Strategies, and Analytics
• Forensic Consultancy
• Infrastructure and Economic Advisory
• Risk Advisory
• Legal Management Consultancy
• Tax Advisory

10.  McKinsey & Company

• Background – Considered a giant amongst the Financial Consulting Firms In India, Mckinsey opened its doors in India in 1992. In India, it has a presence in 7 cities and works with a workforce of more than 1900 employees. It has more than 130 branches in over 65 countries globally

Financial Consulting Services Offered:

It offers consulting expertise in the following areas related to finance –

• Mergers and Acquisition
• Risk and Resilience Advisory
• Strategy and Corporate Finance
• Transformation Advisory

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Conclusion:

The Indian economy has grown leaps and bounds post-1990s. The positive growth in the business sector and the over Indian GDP has been credited to the vast expertise, and experience of the Financial Consulting Firms In India. Although faced with challenges related to laws, regulations, and fast-paced digital innovations, not only the Indian Financial Consultancy firms but albeit the global Financial Consultancy leaders have risen to the challenge and helped in strengthening the economic landscape of India. The once family-owned Indian business industry has transformed into a corporate giant with a strong financial backbone due to the expertise and guidance of these Financial Consultancy firms. Thus, to conclude Financial Consulting Firms In India have been major contributors to the thriving Indian Economy in the present day.

FAQs

Q. What are the advantages of a Financial Consultancy Firm?

A Financial Consultancy firm creates a long term strong financial strategy for firms and individuals which is as per the requirement. These are researched and decisions are data-driven, thus ensuring lesser chances of risk. They promote financial well-being with sound financial recommendations. They help in proper tax planning to reduce the tax burden in a safe and compliant way. They help in identifying future risks and help better prepare for the unforeseen. They help in the optimization of cost. They help in preparing companies for any kind of market turbulence.

Q. What are the key points for a successful Financial consulting firm?

The leading Financial Consulting Firms In India have the following traits which have catapulted them to the position of leaders. The first trait is top strategies and tools for best financial planning and wealth management which is flexible. The second trait is the ability to do in-depth market research and keep themselves updated with the market practices and trends. The third trait is the extensive usage of data analytics for making informed decisions. The fourth trait and the most important is soft skills, to ensure the customer experience is exceptional, which will ensure client retention and good word of mouth.

Q. Do Financial Consulting Firms deal with only Corporates?

A majority of Financial Consulting firms cater to the individual sector too. They provide gold loans, two-wheeler loans, loans against bonds, loans against property, loans against insurance, retail loans, professional loans, used vehicle loans, and other loans. They offer advice and solutions in the area of tax planning, investments, and insurance. The companies also offer consultancy building property portfolios by advising on the properties to invest in, mortgage loans and financers, and plans for a better return on investment.