Young and Associates (Y&A), a local financial sector startup, has formed a strategic partnership with accounting firm BDO International, and will become BDO Financial Advisory Services Ltd (BDO FASL) later this year, Y&A managing director Angus Young said during an interview on Monday at his Woodbrook office.
The changeover is expected to take place by August as "the paperwork is being processed now," Young said.
"With Y&A joining BDO, BDO in Trinidad now becomes a complete, full service firm being able to offer audit, accounting, payroll, tax, forensics and corporate finance and transaction advisory services."
Since 2007, BDO has been operating and will continue to operate as an accounting firm in T&T. BDO FASL will be created as a separate legal entity with its own board of directors.
"We will have a seven-member board. Three of the board members would be from BDO: Riaz Ali, the local BDO partner; Andrew Bickerton and Glen Trenouth, from the BDO offices in BVI and Cayman Islands, respectively. The other four will be all locally based. My dad, Richard Young, was appointed chairman of Y&A in February, and will continue to chair BDO FASL. I will remain as managing director and there are two other directors."
Asked if this would mean a return to accounting for recently retired Scotiabank managing director Richard Young, Angus said: "Despite popular belief, this was not planned. For 17 years, my dad and I did not talk business because he was at Scotiabank and I was in banking, too (at RBC).
"The conflict of interest was clear and we–being best-practice professionals–did not talk business with each other. Business is something we're both passionate about, so dare I say, it even strained the relationship a bit."
Angus said when he ended his investment banking career at RBC three years ago to launch Y&A, he still could not talk business with his father because Y&A was launched as a corporate finance and transaction advisory firm, and the conflict of interest remained.
"But with him retiring, I saw it as a perfect opportunity to bring him on board, to leverage his experience, and his network for the benefit of the firm, and to kindle the relationship on a business level that I've never enjoyed," Angus said.
"Talking business with him and having that interaction as father and son, as two business consultants, has been surreal. It is something that I thoroughly enjoy, and I've missed it all these years."
Before heading up Scotiabank, Richard worked at PricewaterhouseCoopers (PwC) for approximately 20 years, and made history as the youngest accountant to be made partner of PwC at age of 29. PwC will be one of BDO FASL's two main competitors. The other major competitor, Angus identified, will be Ernst and Young.
BDO's worldwide network of public accounting firms which operate in more than 100 countries, makes it the fifth largest in its field in the world. The first four, often referred to as "the big four," are PwC, Deloitte, Ernst and Young and KPMG.
"This story is about a local start-up corporate finance and transaction advisory firm named Young and Associates Ltd that was formed via greenfield effort by two investment bankers, Angus Young and Allan Clayton," Young (Angus) said.
Greenfield refers to the fact that Y&A started from scratch with no clients in its initial portfolio.
"Three years later, the indigenous start-up has taken a significant step to become a globally-branded practice by joining the ranks of BDO."
The benefits of becoming a part of a global professional institution brings far reaching ability and allows Y&A "to now fish in waters that we didn't have access to before," Angus said. Belonging to this network, gives Y&A access to 1,000-plus offices in more than 100 countries, with worldwide BDO staff numbers in excess of 46,000.
Eat what you kill
Given the new reporting relationship, Young will have with BDO, he was asked if this is a return to employment.
Angus said: "No, not for me. For my staff, they would be staff, but no, I'm still in the entrepreneur mode."
He said that with BDO coming on board, his arrangement stays as it is.
He said he has full autonomy to run the business the way he ran it before.
"When I hire people, obviously, they would have the security of a salary, but not me, I maintain the motto of I only eat what I kill."
Y&A, its managing director said, is different from the big four globally-branded firms in that its principals were market practitioners. This means due to their past life in banking, "we had actually been intimately involved in financing numerous sizeable transactions involving mergers and acquisitions, capital expenditure investments, re-structurings, divestments etc. throughout the Caribbean region."
These are also some of the services the future BDO FASL will provide.
"Also, its (Y&A's) principals held senior managerial positions throughout the financial industry and did not grow up in the typical fashion of joining professional services firms as juniors," he said.
He explained accountants usually start as juniors at firms like the big four and move up with qualifications earned and experience gained.
"Y&A's clients enjoy the benefit of having career investment bankers act on their behalf. No other transaction advisory firm can claim similar accolades. We want to preserve this advantage by transferring our experience and knowledge base to our fellow team members who may not necessarily have had this type of exposure."
Young said his investment banking experience made him a dealmaker, which he described as "a skill that is the actual fuel for transaction advisory services. So not only can we create transactions where there were seemingly none, we can understand them, facilitate them, fund them and most importantly execute them."
Young said he recognised the importance of becoming part of becoming part of an international brand, and commenced a search for a suitable and untarnished firm with whom we could seek an alliance, with the intention of becoming part of a full service organisation.
"In carrying out our core services, we noticed that audit, accounting, tax and payroll service opportunities would present themselves to us, but we weren't geared to take advantage of same. Y&A approached a couple locally-based accounting practices and found that BDO was the best option.
"BDO was our first preference largely based on BDO's untarnished global reputation for excellence and the immediate shared vision between Y&A's managing director and BDO's local partner, Riaz Ali."
Young said he and Ali "hit it off almost immediately."
Ali will continue to lead the charge as BDO's audit partner, while Young will take responsibility for business development across all of BDO's service lines.
Other talent BDO FASL has attracted is insolvency expert Victor Herde. Young said the expert, who he brought out of retirement "will mastermind BDO FASL's insolvency practice" and will serve as a senior adviser in the new firm.
Gutsy move
"Leaving my investment banking career was a very difficult move because I was well poised within the industry and benefitted from the tangible perks associated with same. It was a very secure career because an investment banker is forced to be well versed in so many different aspects of banking, and this ability makes one very marketable within the finance industry regionally," he said.
"However, I am betting that taking a step back (by leaving a very profitable, stable and secure banking career) will result in multiple steps forward."
The younger of Richard Young's two sons said: "Without a doubt, this move would not have materialised were it not for my very supportive wife of nearly seven years, Teneille, who, not only understands my entrepreneurial desires, but was and continues to be willing to make the tangible sacrifices because she has the confidence in me and supported a gutsy move away from stability and security."
About BDO
According to the Web site bdointernational.com, BDO said its distinctive reputation for client proximity is built upon its commitment to all its stakeholders that what matters to them matters to BDO. BDO said it was founded in 1963 when firms from the United Kingdom, Netherlands, Germany, United States and Canada joined forces to share and expand their knowledge to better support clients. It was then known as Binder Seidman International Group until 1973, when the name changed to Binder Dijker Otte and Company: BDO.
BDO now provides services to its clients in 135 countries. In 1988, it established a world wide structure and the BDO acronym was placed before each local member firm's name. In 2009, the name changed to BDO, now the world's fifth largest accounting network, with almost 55,000 people working with its clients and offering challenging, ethical and practical advice from 1,204 offices in 138 countries.