Much like in other less developed countries, Nepal’s financial consulting sector tends to be made up of a few large companies, often top consulting firms, which dominate the industry in addition to many smaller firms that often compete quite intensely. The smaller consulting firms tend to work with smaller, local clients since branching out internationally can be difficult due to cultural differences and language barriers which often arise.
What financial consultants will do is work with both businesses and individuals to plan for their financial futures by offering advice and guidance on particular issues that clients may have. There is a multitude of issues that financial consultancy firms will assist with including financial management, auditing services, and tax consulting services as well as many more.
Within each of the individual services that financial consultants offer, there will be challenges that specifically apply to them. Additionally, there are general challenges that tend to be constant across all of the services and apply to financial consultancy companies as a whole. Challenges can both arise internally within the company itself, and externally within the industry and often in relation to the country and its policies.
Internal Challenges
The first of these general issues that are present, is the struggle for smaller firms to acquire and retain employees who have the education and expertise to carry out the work the financial consultancy companies require to provide to clients. This part is a reflection of the shortage of qualified staff which is a result of the poorer education system that tends to be present in less developed countries. Additionally, smaller firms will struggle to pay the higher wages that are demanded by more skilled potential employees. This leads to the second issue that can affect smaller consultancy firms. This is the uncertainty surrounding revenue streams into the company. Due to the nature of the consultancy business itself, where revenue streams for a company are dependent on clients approaching and requesting services, a consistent flow of revenue for the company is not always guaranteed, especially for smaller companies. One of the major issues that this can cause is the inability to offer high salaries to employees who have the expertise necessary to supply the services a company is looking to offer.
The use of Internship Programs
A way in which companies in less developed countries tend to approach these challenges is through the utilization of internship programs. This both assists with the issue of having a well-educated workforce as well as the problems regarding inconsistent revenue streams. These internship programs tend to use both local and international university students and graduates. They provide access to a workforce that may not be as educated and experienced as a full-time employee would be expected to be, but often are skilled in things like research techniques and are able to contribute to some extent to the provision of services that financial consultancy companies look to provide.
Market Competitiveness
The first two challenges were mentioned related to the internal operations of the company itself. An external issue that affects financial consultancy firms within Nepal is the competitiveness of the market. As mentioned, within Nepal there are a few larger firms that have a greater market share along with many smaller financial consulting firms which are often quite similar in terms of the services they offer. Due to these factors, it can be difficult, specifically for smaller firms, to compete. Companies can approach this challenge by distinguishing themselves from their opposition. In an industry such as financial consultancy where there is little opportunity for variation in terms of the services that are offered between firms, it can be difficult for them to distinguish themselves. One of the ways in which smaller consultancy firms within Nepal try to do so is by emphasizing their ability to tailor their services to clients' needs. This is something smaller firms are more capable of doing in comparison to larger firms.
Compliance with Regulations
The final challenge which relates to the external business environment and affects financial consultancy firms specifically within Nepal is in regard to the regulations that are used within the country. With there often being changes made to these regulations, for example, Nepal’s adoption of IFRS in 2013, the transition to using them can be difficult. An approach by which this transition can make it easier is through the use of internationally educated employees. For example, as mentioned previously Nepal only adopted the IFRS in 2013, whereas these regulations have been in place for much longer in other countries. By having a diverse workforce in regards to educational background, the transition to these new regulations can potentially be made easier.
What can be seen from this is that both the utilization of human resourcing by using international employees and interns as well as implementing a strategy that differentiates a firm from the rest of the competition are two ways in which Nepalese consultancy firms can approach the challenges that they face.