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‘Poor advice’ loses UK firms £6.4 billion

Poor professional advice from third parties or consultants has resulted in one in six (16 per cent) small and micro businesses (around 320,000 enterprises) losing money, according to new research published by Direct Line for Business.

Professional advisors, such as accountants and property consultants, are warned that they could be pursued for losses incurred as a result of giving substandard advice.

The research reveals 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, with one in five (19 per cent) claiming to have lost between £50,000 and £100,000.

In total this would equate to a whopping £6.4 billion lost by small and micro businesses as a result of poor advice in the past 12 months. IT consultants were identified as the professionals most likely to give damaging advice. Four in ten (44 per cent) businesses whose operations were affected by bad advice blamed their IT consultants.

A third (34 per cent) of businesses suggested it was poor advice on management issues, while 32 per cent claimed incompetent marketing consultancy negatively impacted their business.

Losses are not just financial either. Nearly half (46 per cent) of affected companies suggested they were forced to lay off staff because of poor professional advice and three in ten were forced to halt/scale back expansion plans.

Read the findings in full at bit.ly/1NEh4my