KPMG won’t enforce 58-year-old retirement age with new Ferrier Hodgson partners


Mr Stewart, who has been at Ferriers for 30 years of the firm’s 40-year existence, said KPMG offered more services and there was strength in being part of a bigger brand like the big four firm.

“Our brand is a strength but can be a problem on another front,” he said. “When these guys approached us to buy our shop, we were pretty flattered by it, to be honest. It is not a deal we needed to do. We are as busy now as we have been in the past three or four years.”

The deal was signed in Sydney on Thursday, with staff told at 11.30am and clients sent a note shortly afterwards. Both sides declined to reveal the transaction terms.

No forced retirements

As part of the deal, most of Ferrier Hodgson’s 120 staff will be offered roles at KPMG “on no less favourable terms”, with negotiations at an “advanced stage” for the six partners from Ferrier Hodgson’s Adelaide office, Mr Woods said.

Professional services giant KPMG has purchased Ferrier Hodgson. Peter Braig

He added that the “investment rationale” for the purchase would not make sense if the 20 incoming partners of Ferrier Hodgson had to retire at 58.

A number of Ferrier Hodgson partners are at or nearing 58, the age at which the standard KPMG partner agreement states “the firm expects a partner to retire”, including Martin Jones (58 years old), George Georges (55) and Mr Stewart himself (54).

“KPMG partners voluntarily retire from the firm at different ages and stages of their career,” Mr Woods said. “We have more than 20 partners over the age of 58.

“The investment rational wouldn’t work if we were going to acquire this businesss and retire these partner in a couple of years’ time.”

Shifting restructuring market

The shift to creditors acting more quickly when companies get into trouble is a trend also noted by Leon Zwier, a restructuring partner and insolvency specialist at law firm Arnold Bloch Leibler.

“The insolvency and restructuring market has moved away from the days when banks appointed receivers and pursued recoveries, to a more nuanced private restructuring market,” he said.

Mr Zwier said that financially distressed companies “now seek to informally restructure by working with their financiers and not against them”. “Informal restructuring produces superior outcomes for all stakeholders,” he said.

He said KPMG’s move was “win-win” for both firms: “KPMG has now bolstered its professional expertise by acquiring Ferriers. Ferrier Hodgson will now benefit from rivers of company side restructuring work.”:

One Ferrier Hodgson partner, Stewart McCallum, has opted to join rival professional services giant EY instead of going to KPMG.

EY’s head of restructuring services, Adam Nikitins, did not want to comment on the KPMG-Ferrier Hodgson sale but noted that the formal insolvency market “was the slowest in a generation”.

“This exposes the strength of a multi-disciplinary firm and exposes what can be seen as a monochromatic offering from a specialist insolvency firm,” he said.

At PwC, the integration of PPB into the firm was “tracking ahead of expectations, with clients benefiting from an integrated offering”, said Helen Fazzino, the managing partner the firm’s restructuring unit

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