This is truly great news for all of us, and I'd like to begin by explaining what it means for everyone, and in particular, what it means for your business.
How does the JBR work?
Accruit's new relationship with PwC is not a sale or a merger – there is no change of control involved. Accruit will remain an independent and autonomous company and I will remain as president and CEO. Instead, it's an agreement that defines how we will collaborate in order to better serve the 1031 exchange marketplace. Here's how it will work:
- Over the next several months Accruit and PwC will be working together to migrate the day-to-day compliance and tax reporting functions of our current LKE program clients to PwC. Accruit will continue to be the qualified intermediary (QI) for our existing clients and will be the preferred QI for future PwC program clients.
- PwC will be hiring three Accruit Client Service Managers (CSMs), so in most cases existing Accruit clients will continue working on a daily basis with their current CSM. In order to assure continuity of operations for our valued clients, these employees will remain on-site at Accruit headquarters in Denver for the time being.
- One change that will take place eventually will be a migration from Accruit's Exchange Manager™ platform to PwC's eLKE platform. However, before any such changes take place PwC will be looking under the hood at our highly successful software. We expect that future versions of the platform used by our clients will integrate the best of Exchange Manager™ and eLKE, a best-of-both-worlds approach that serves the effectiveness and efficiency of your business. During the transition period, we will develop and execute a strategy for this migration, and your input will be important in this process.
- The bundled services solution includes qualified intermediary and LKE services, the same uncompromising one-to-one client service to which our clients are accustomed, and a more comprehensive and integrated tax advisory solution.
Obviously clients old and new will see an evolution in their service over time, just as they would in the absence of the JBR. The difference is that now product and service iterations will be able to take advantage of the best that both Accruit and PwC have to offer. In the past, clients were forced to choose, either/or, between PwC and Accruit, both of which represented a particular set of advantages. Now businesses with LKE programs will be operating in a both/and world that we expect will result in greater effectiveness, operational efficiency and service.
Why PwC and why now?
Periodically people familiar with the 1031 industry have asked us why Accruit and PwC weren't working together. The truth is that our two companies collaborating on solutions and services would represent significant benefit for our clients.
The reasons are compelling.
- PwC is an industry leading provider of 1031 exchange tax services.
- Accruit is the #1 qualified intermediary in the nation.
- Accruit and PwC are the top two providers of 1031 exchange program solutions.
- Together PwC and Accruit serve more than 150 LKE program clients. The next largest player in the space serves fewer than 15 clients.
The natural synergies between what the two companies do are obvious and powerful. Together we are stronger than we are apart because we can now integrate services that were previously marketed as competing offerings.
I hope it's clear just how great this opportunity is for 1031 exchange clients across the country. We're excited about the future and are convinced that the Accruit/PwC JBR represents a tremendous benefit for the clients that we've served over the past decade.
If you have further questions, let me refer you to the official press joint release from PwC US and Accruit. In addition, clients can contact their Client Service Managers for more information, and as always the leadership team welcomes your feedback. I can be reached at email@example.com or 866.397.1031.