“As an Auditor, I applied for tons of investment banking, strategy and private equity type roles, and yet not a single interview. After only 6 months in TS- Valuation, I had banking recruiters messaging me on LinkedIn.” Why?
This article answers that question and will uncover the skills one can gain in Transaction Services which you don’t get in Audit. I will also highlight what it can do for your career trajectory & the available exit opportunities.
Why Transaction Services (TS)?
Audit has become a commodity and Audit fees are being suppressed. That explains why below-manager Audit salaries are so low and you are needed to work such long hours. This is the only way to ensure the audit is profitable.
TS fees on the other hand are very lucrative. For example, I worked on a business valuation project for a client which took me a week and we billed the client more then their entire external audit fee!
Also, TS Partners are mostly ex-auditors themselves, so they prefer to hire from audit. They understand an auditor is a rough diamond and with the right coaching and training can become very polished.
Big 4 TS Advisory offer lots of training and on the job coaching to new joiners, most of them are from audit (both internally and externally).
What is Transaction Services?
Commonly known as TS advisory / Deals Advisory / M&A advisory / Financial Advisory (hereafter referred to as “TS Advisory”), is a department in Big 4 (and other professional services firms) that work on corporate transactions.
In simple terms, TS Advisory can provide advice on anything related to the sale and purchase of a companies shares or assets.
Within TS Advisory, there are the following sub-departments which specialise in:
- Financial Due Diligence (“FDD”)
- Valuation
- Corporate Finance
- Post-merger integration
- Business Recovery and Restructuring
The goal of Big 4 TS is to be the trusted advisor (to the client) across the deal cycle. Hence each sub-department works closely together and assists on different stages in a deal.
Summary of a Deal Cycle
What You will Learn in TS
1. Transactions Expert – After working on several deals, you will become familiar with;
- how transactions are structured
- the M&A process
- Sale & Purchase Agreements
- Negotiation
2. Trusted Advisor – You will learn to operate as a trusted advisor / consultant to your client.
3. Presentation – You will learn to present your findings both internally and externally.
4. Report Writing – You will learn to storyboard and structure your reports in a visually appealing format . You will also become very good at report writing and PowerPoint.
5. Business and Strategy – You will develop sound business acumen, develop a commercial mindset and think more strategically.
6. Business Development, Sales and Persuasion – you will prepare proposals and pitch for advisory work. You will also learn to sell your ideas and defend your assumptions both internally and externally. For those in Corporate Finance, they will learn to network and put together deals.
7. Financial modeling – If you are working in Valuation and Corporate Finance, you will be very comfortable building financial models. If you are in Financial Due Diligence or other teams, you will be comfortable reviewing financial models.
8. Valuation and other- You will learn business valuation, how financial instruments are used in transactions and understand M&A accounting.
Exit Opportunities from TS
Valuation –
- Investment Banking and Private Equity– key skills required in these roles are valuation and financial modeling. So its very common for valuation specialists to move into these roles.
- Corporate Development (in-house M&A and Strategy)
- Corporate Finance (in-house)
- Strategy (in-house or consulting)
- FP&A / Financial Analyst
- Venture Capital – generally more difficult but if you have worked on several start-up engagements and have a passion for tech start-ups, then its doable. (I am currently in the VC space)
- Hedge Fund – generally more difficult but if you have a passion for investing in stocks, its very doable.
Financial Due Diligence–
- Private Equity– since a large part of Big 4 TS business is providing Financial Due Diligence to Private Equity Clients, its common for PE funds to poach from FDD.
- Investment Banking
- Corporate Development (in-house Strategy and M&A)
- Strategy Consulting
- Strategy (in-house)
- FP&A / Financial Analyst
Corporate Finance –
- Bulge bracket Investment banks and PE funds – this exit is most common.
- All of the above
ABOUT THE AUTHOR:
Bilal is an internationally renowned coach for aspiring CA’s and CPA’s.
Bilal believes that CA’s are individuals with grit, perseverance and sound business and financial knowledge.
Yet he finds many not achieving their dreams and goals. He created this website to help young CA’s maximise their potential and fast-track their careers.
You might be interested to visit his LinkedIn page https://www.linkedin.com/in/bilalnoorgat/ to learn more about his background.