Advisory is the practice of offering information and advice to other professionals to manage future risks, often based on data modeling and the application of lived experience. It’s a long-term relationship that helps a business to proactively prepare for change and uncertainty.
Consulting is the practice of recommending expert solutions to other professionals working in business, financial, or technical fields. It’s shorter-term in nature, with consultants delivering solutions to defined problems the business is currently facing.
While advisory services deal with more long-term issues and consulting more immediate ones, both still transform businesses, helping them to improve their performance. In that respect, they are at two points on a continuum rather than intrinsically different services.
If you want to know more about the differences between consulting and advisory services, you’re in the right place! We’ll make this murky topic as clear as possible.
In this article, we’ll discuss:
- How consulting work is different from advisory work.
- The similarities of consulting vs. advisory services.
- Salary, work-life balance, and travel.
- Your career after consulting vs. advisory services.
- Are consulting and advisory services really all that different? There are exceptions to every rule.
Let’s get started!
How Is Consulting Work Different from Advisory Work?
There are several ways that advisory differs from consulting work. Let’s have a look at the biggest distinctions.
1. Level of Certainty
Consultants . . .
- Help organizations solve problems that are preventing them from delivering on their strategy. Because of this, there is more certainty around the nature of the problem.
- Focus on the client’s external environment, market forces or what the client’s competitors are up to. The core proposition of a consultant is to bring expertise they’ve gained from working across many clients in the same field or even different industries altogether.
- Take a reactive approach. They benchmark clients’ performance against market or competitor information and propose the changes required to keep the business competitive in that environment.
Advisors . . .
- Sit alongside business leaders to facilitate their thinking. They help them get clear on the unknowns their businesses may face due to changes in regulation, technology, and forces outside their control and support them to scenario-plan based on their knowledge of the company’s strengths and weaknesses. Because of the focus on future unknowns, there is less certainty in the nature of the problem.
- Focus more on a company’s internal environment. This is because the external environment is uncertain or ill-defined.
- Take a proactive approach, identifying issues that may affect their clients in the future and proposing ways to prepare for them. While consultants are seen as problem-solvers, advisors are more like problem-definers.
2. Engagement Length
Consultants are brought in to solve a short-term problem within a defined project scope. Consulting engagements are usually one-off. Once the solution is in place, the consultants disengage and move on to another defined problem or, more often, another client.
Advisors, however, are brought in to help companies look to the future and try and scope the risks and opportunities that are out there but not yet obvious. The boundaries of the engagement are less defined and so are typically longer.
Advisors may be engaged repeatedly by the same client to support annual business planning or when the strategy changes.
Consultants and advisors use different toolkits. Consultants approach business problems with frameworks, or blueprints, gained from their experience of working with other clients.
They analyze the problem the client is facing and then look for similarities with previous projects. They use models that have been successful in the past and tailor them to the client’s specific needs.
Advisors use their expertise and lived experience to propose possible solutions.
Both consultants and advisors use data to inform their perspectives. Consultants react to current information about business operations to propose changes for the future.
Advisors may be engaged when a company is contemplating a more fundamental change to its operations. They may use modeling to show how things could look based on their experience and factors specific to the business they’re advising.
4. Organizational Knowledge
Advisors can’t work the way they do without deep organizational knowledge. As their focus is on planning for scenarios that are yet to occur, they need a robust understanding of the strengths and shortcomings of the business to offer a perspective on how to future-proof it.
While consultants also need an understanding of the organization, it can be more superficial. Consulting teams expect business partners to consider how the company culture, strengths, and weaknesses might affect implementation.
The requirement for this type of knowledge is another reason that engagement length is typically longer for advisors than consultants.
It also means that if repeat client engagement is required, the same advisory services team will be used where possible, so the deep organizational knowledge is retained. This is less important for consulting services, and the makeup of a consulting services team will often change even if returning to the same client.
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Deloitte Consulting Vs. Advisory
People often look to Deloitte to understand the difference between consulting and advisory because Deloitte has both a consulting and an advisory practice.
Deloitte describes its Risk and Financial Advisory services as, “In Advisory, we do not take a defensive crouch. We move forward, defining the unknowns and framing the issues before you encounter them.”
This aligns with what we know about advisory services — that they’re preemptive engagements sought out by business leaders to create new opportunities (e.g., new products and markets) and reduce their future risk.
Deloitte describes their consulting practice as collaborative, working with industry partners to “provide practical perspectives and solutions…to today’s most pressing challenges.” Again this aligns with what we know about consulting services — there’s a focus on using deep industry knowledge as a blueprint to solve specific problems.
How Are Consulting & Advisory Services Similar?
There are also similarities between the work of consultants and advisors.
- Both provide an external perspective based on what they have seen work in the past. That might be through delivering successful projects with previous clients or through having lived through the solution in another role.
- They don’t own any decisions taken by the business. They can provide strategies, models, analysis, and advice, but, ultimately, the business has to take responsibility for deciding the way ahead.
- They don’t own the implementation of the decision. Consultants will deliver a solution within the bounds of a project which, at some point, needs to be handed over to the business for implementation and adoption into their standard procedures. Advisors provide advice that shapes a course of action for business leadership. The work that needs to be done to deliver that action is then implemented and delivered by business management and teams.
Salary, Work-life Balance, & Travel
Glassdoor suggests Advisory salaries average around $70,000/year. An Advisory intern earns around $30/hr.
Consultant salaries may be significantly more depending on the firm. Salaries for entry-level consultants at the top three strategy consulting firms — McKinsey, BCG, and Bain — can top $100k.
At the Big Four, entry-level base salaries range from $75-$90k. Consultants may also earn more through signing and performance bonuses.
Given the short-term nature of consulting projects, it can be harder to create a work-life balance. During the project term, consultants are expected to be entirely focused on delivering a solution by the deadline, which can mean longer hours and some compromise on home and social life.
This is dependent on the project and your role in it. More junior team members who are responsible for actually getting the work done may need to put in more hours than more senior consultants who hold accountability but don’t actually need to deliver spreadsheets.
As an advisor, your work-life balance is much more likely to be similar to that of company employees. As such, this will differ from one client to the next.
For consultants, travel depends on the projects they’re assigned to and whether the client needs them on-site or they can work remotely. Travel can be a perk of the job or a downside, depending on your perspective, so it’s worth researching the level of travel a position requires while assessing which firm and career path is right for you.
Your Career After Consulting Vs. Advisory Services
Typical careers post-consulting are varied. They include corporate strategy roles, work in venture capital, and positions in business leadership. The skills you learn and the prestige of having worked in a top firm mean ex-consultants are in demand across a variety of employers.
For both consultants and advisors, the relationships established with clients mean a future role as a permanent employee is a possible option.
Skills learned in advisory services offer natural routes into risk management, scenario and contingency planning roles, and think tanks.
Both consulting and advisory services develop your capability in a range of skills that are in demand across several roles and industry types. These include problem-solving, stakeholder management, relationships-building, communication, analysis, and teamwork.
This means that whether you choose a route in consulting or advisory, there are several options available for you to consider after your time as a consultant or advisor is over.
Back to the Fundamental Question: Are Consulting & Advisory Services Really Very Different?
For almost every generalization we’ve made about how consulting and advisory services are different, we can find an exception.
Examples of Consultants Acting Like Advisors
Consultants are usually hired to solve short-term problems, but there are plenty of examples of consultants on client service teams rolling off of one project with a client just to start on a follow-on project or even an entirely new project with the same client. There are also examples of consulting firms being kept on retainer in order to have them ready to assist challenges on an ongoing basis.
Consultants’ work is usually more externally focused, bringing industry best practices to bear to solve client problems. However, clients have been known to hire Bain to act as their internal strategy department. These consultants are much more ingrained with the client organization and less focused on bringing external best practices to bear on specific problems.
The more senior you become in a consulting firm, the more like an adviser you act. For instance, partners might have quarterly lunches with senior business leaders to understand what problems they’re facing and what’s worrying them. They act as an advisor until one of these problems or worries requires an immediate solution, then they scope a project out and staff it with a team of consultants.
Similarly, as consultants become more senior, they are less likely to rely on data in forming hypotheses and more likely to rely on lived experience. Of course, they’ll have analysts on their team run the numbers before making recommendations, but associate principals are said to be able to see a trend with only 2 data points and partners with only 1.
Example KPMG Advisory Case
This case of KMPG Advisory services helping Dawn Food could easily be seen as something that would be undertaken by a consulting team.
Dawn Foods serves the baking industry worldwide with everything from raw ingredients to ready-to-sell products. The company was facing industry disruption and significant changes in buyer behavior and realized it needed to overhaul its operations at an enterprise level.
KPMG Advisory was asked to help Dawn Foods as they navigated the unknown. KPMG worked alongside Dawn Foods to create a target model for the organizational design and operating processes the business would use in the future, including scoping future governance structures, business performance metrics, and business process change requirements.
KPMG also helped Dawn Foods overhaul its current operations, saving tens of millions of dollars in operational efficiencies and helping to design, build, and deploy a new cloud-enabled, digital bakery business platform.
KPMG left Dawn Foods with a sound digital transformation strategy in place and, to date, Dawn Foods has met all its targets for revenue, margin, and adoption.
– – – – –
In this article, we’ve covered:
- The differences between advisory vs. consulting services.
- The similarities between consulting and advisory work.
- What to expect regarding salary, work-life balance, and travel.
- Career options after a role in consulting vs. advisory services.
- Sample instances showing that consulting and advisory services are not really all that different.
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