Better the Devil You Know?

21 February 2011

There’s always a tendency to batten down the hatches during stormy times. And we often prefer to stick with our existing advisors (however odious) with the idea of shopping around when things calm down.

The banks have suggested that customers, on the whole, have stayed put; and even the state owned tinkers have regained enough confidence to begin nudging up charges and interest as they bolster their own balance sheets.

But so far it seems that the idea of giving more time to your banks may, in part be working. In 2010 insolvencies were at there lowest level for many years. You can argue that some businesses have been propped up but there may be an underlying strength in the commercial world. The same can’t be said for personal insolvencies. Is there a link?

In the accountancy sector too there has been little evidence of chopping and changing. Accountants have been engaged in doing more work for their existing clients, be it strategy, credit control or the rapidly increasing need for tax planning. As we (hopefully) pull out of recession, cash will be scarcer still in some areas as businesses struggle to fund increases in turnover. Funders will ask for ever more information and accountants that can speak the banker’s language will be sought after. It will be a case of survival of the fittest and the best advised.

So 2011 may be the year to take a step back and look at the value that you are paying for. Staying with a bank or an accountant simply because you always have is no longer a sensible reason (unless, of course, you’re waiting for a lending decision!).

And let’s face it; the banks have pretty good advisors. Whoever sorted out Barclays’ 2.4 per cent Corporation Tax rate this year deserves a cigar.

Stuart Wilkin writes for Insider

Posted  21 February 2011


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