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Poor Professional Advice 'Costs UK SMEs £6.4bn'

Posted on August 13, 2015 at 11:00 AM

Around 320,000 small and micro businesses in Britain have lost money as a result of poor professional advice from third parties or consultants, according to research published by Direct Line for Business,


It reveals today that advisory consultants and other such firms have cost Britain’s small and micro businesses an estimated average of £20,842 in the past 12 months due to inadequate professional consultancy. One business in five (19%) claims to have lost between £50,000 and £100,000.


In total this would equate to £6.4 billion lost by small and micro businesses as a result of poor advice in the past 12 months, it says.

 

IT consultants were identified as the professionals most likely to give damaging advice. Four in ten (44%) of businesses whose operations were affected by bad advice blamed their IT consultants. A third (34%) of businesses suggested it was poor advice on management issues, while 32% claimed incompetent marketing consultancy negatively impacted their business.


 “Our research clearly highlights the devastating effect poor professional advice can have on small and micro businesses. However the impact on an advisory firm that is facing litigation can be just as shattering. For those providing advisory services, it is important to recognise that issues can occur and clients could pursue them for compensation” says Nick Breton, Head of Direct Line for Business.

Categories: Governance, Scrutiny