International networks, associations and alliances maintain growth amid prolonged uncertainty

International networks, associations and alliances maintain growth amid prolonged uncertainty

Accountancy Age’s international survey 2021 reveals that, despite a tough year, global accountancy networks, associations and alliances have maintained growth while pulling out the stops to support their members

International networks, associations and alliances maintain growth amid prolonged uncertainty

View the top 25 international alliances and associations 2021 here, and the top 21 international networks here


Global networks grew by an average of 6.5 percent, while associations and alliances saw their collective fee income increase by a more modest 1.2 percent. In total, the fee income of the 25 networks included in this year’s survey rose to hit more than $222bn, compared with $209bn last year, while the 21 associations and alliances increased their fee income to $40.8bn, up from $40.3bn in 2020.

This year, the tables have been extended to include more international networks, creating a top 25, while the alliances and associations now includes 21 of the largest such groups.

Inevitably, there have been winners and losers within each group, although only four networks, and six alliances and associations saw their collective fee income fall since last year.

Big Four

Among the Big Four, Deloitte remains comfortably ahead of its nearest rival PwC, though both groups have revealed 5 percent growth this year, respectively. Deloitte broke through the $50bn barrier this year, while PwC continued its march upwards to top $45bn.

But it is EY, ranked third, which achieved the highest rate of growth among the four accounting giants. This year it reported a 7.5 percent increase in fees to hit $40bn. KPMG, which last year saw its total fee income dip by one percent last year to £29.2bn, has returned to growth, recently revealing a 9.9 percent hike in global income to $32.1bn.

It is difficult, however, to underestimate the importance of the Big Four in the international rankings – combined, they account for more than 75 percent of the total income of the top 25 networks. Three out of the four individually earn more than the next six largest networks combined, or all the 21 associations and alliances. Therefore, all eyes are currently watching the current debate over audit market reform, with the other international groups predicting both opportunities and threats as regulators seek to curb the oligopoly’s market dominance.

Lingering pandemic

But equally, these same eyes are at the same time trained on the lasting impact of the pandemic. In 2020, the industry overnight switched to online platforms that ensured the international groups were able to continue to deliver the support and services that their members not only expected, but desperately needed. For the smaller networks and associations, the ability to build and maintain contact with colleagues around the world is of vital importance – serving clients that have an increasing appetite to trade internationally becomes much easier if there are trusted partners around the world that are able to provide on-the-ground expertise, no matter where the jurisdiction.

The pandemic has, in effect, given these organisations the opportunity to demonstrate their value, while also showing how they can take advantage of any future regulatory changes.

“The winds of change are certainly blowing across the profession,” says Graeme Gordon, CEO of Praxity Global Alliance, the largest of the alliances and associations. “The advantage of an alliance is that we have strong firms who can refer work while maintaining their independence. We believe that the current proposals will create a number of opportunities for our member firms.”

Praxity can list Mazars, included separately in the networks’ rankings for the first time, as one of its members, contributing nearly $2.3bn to Praxity’s overall $6.9bn income.

“We see opportunities in many areas,” says Ozgur Demirdoven, executive vice president of international association Allinial Global. “Accounting and consulting firms are still grappling with questions about workplace changes ushered in by the pandemic. Recruiting and retention, management of remote and hybrid teams, and strategic growth will continue to be critical topics for firms who want to stay relevant in a changing profession.

“Likewise, there are significant opportunities in helping members find and implement the right tools and technologies for their firms. Global connectivity continues to be a high priority for firms, so there will also be opportunity in tools and platforms that make it easier for members to communicate and collaborate.”

Michael Reiss von Filski, Global CEO of GGI, adds: “Our alliance consists of strong, independent mid-sized firms. They are all ready and able to address future regulatory challenges and keep abreast, following closely the intended modifications. We see excellent opportunities for both our member firms and GGI as a whole in the coming years and are generally optimistic, an attitude shared by our members too.”

For now, however, the groups are focusing on helping their members navigate the choppy waters of recovery.

“Member firms have performed better than initially expected due to their ability to fast track their technology offerings and offer advisory support, especially in relation to the government financial schemes supporting businesses during the crisis,” says Giles Brake, CEO of Alliott Global Alliance.

‘Furthermore, most firms have increased their focus on digital marketing and use of technologies such as video conferencing to maintain and build relationships with clients and intermediaries, and of course find and nurture new client relationships and partnerships. I have noticed many member firms also taking the time to work on their businesses, including connecting in a more meaningful way with their purpose and articulating this through their communications and often an updated brand image. I anticipate these new disciplines will remain entrenched in their business operations going forward.”

But Brake has a warning for those groups that were not able to respond as swiftly:

“Some networks and alliances that have not provided strong leadership during the pandemic and that have not worked on their business models and reinvested in improved, digitally driven service delivery will be living on ‘borrowed time’,” he says. “Some are likely to become targets for acquisition as they start to haemorrhage members if goodwill has run out.”

Consolidation continues

The subject of mergers and acquisitions is never far from the minds of those who run these groups. In September 2020, Abacus Worldwide merged JHI into its membership. The association’s CEO Julio Gabay reports that the integration has been a success.

“The merger has added value to our members and allowed the association to push forward on global initiatives more quickly.”

He adds that Abacus continues to be focused on growing membership globally in the legal and accounting sectors, especially in developing areas.

“We added several members from the Latin American and African regions in 2021 and continue to look for quality firms from there and Asia Pacific,” he says.

Both networks and associations and alliances have on average an even split in revenue between the Americas and EMEA, with a smaller percentage coming from Asia and the Pacific Rim. However, it is widely recognised by the organisations that there is growth potential in Latin America and Africa, as both regions seek to build their accounting capacity.

Martin Sharp, executive director at DFK International, adds that the most promising areas for growth for his association are Sub-Saharan Africa and Central Asia.

“These are the regions in which we have the greatest number of jurisdictions where we are least well represented,” he says.

Antonio Gomez, CEO of the Antea Alliance, says: “Despite the challenging times we have been able to grow our membership and we anticipate this growth to continue with the addition of reputable members in strategic locations.

“Antea is a multidisciplinary service association, as such we are particularly focused on covering with more services, especially legal, in locations where we are already present as well as on improving coverage in some regions like Africa and Asia-Pacific.”

UHY’s chair Subarna Banerjee says his network continues a strategy of expansion into new territories and countries and to grow its presence in existing network cities.

“Accelerating growth in key global business centres and economies and greater strength in geographies such as the US, EU and China means more international work for our member firms as a whole,” he says. “Member firms are taking on an increasing amount of international work especially in sectors such as technology, manufacturing, retail & leisure, real estate and not-for-profit organisations.”

Even some of the very largest networks have continued to grow through acquisition. Keith Farlinger, CEO at BDO, reports significant activity: “Our firms keep growing and are strategically adding new – primarily advisory – services, whilst delivering organic growth among the existing business lines. We have fast-tracked into a new business reality, with an increased need for digital & technological transformation. Our mergers reflect this.”

In the US, BDO acquired MBAF, an accounting and advisory firm in Florida, and DemandGen International, a digital advisory services and solutions organisation. Simplicity, which provides technology services, and DVP Capital, a mid-market investment banking and financial advisory team merged with BDO in Canada. In South America, Ithink, a technology partner joined BDO in Panama.

Dr Christian Gorny, CEO of ETL Global Network, predicts that the exit of smaller accounting and advisory firms and the growing pressure of consolidation on smaller market participants will change the competitive landscape dramatically in the next five to 10 years.

“ETL Global will continue to play an active role in the consolidation process,” he says, a point confirmed by the fact that the network’s fee income grew by 41 percent this year, albeit concentrated in its home region of Europe.

Talent and technology

Technology and talent are the other key issues facing the accountancy profession around the world, so it is inevitable that the networks, alliances and associations placed considerable focus on these areas.

“To remain competitive, professional firms need to retain and attract employees trained in the latest technology,” says Ed Turner, chair of INAA. “Technology is drastically changing the way professional firms deliver services and sometimes, these changes are unpredictable.”

Some professional firms use data analytics, AI and Robotic Process Automation (RPA) to remain relevant and deliver high-quality services, adds Turner.

Keeping up with the latest technology could require investments from member firms and associations, to create a more collective approach. This collective approach could be one way to reduce the cost burden on individual firms.

“There will be more specialisation of firms around areas where clients need particular support, be that restructuring, wealth management, cyber or data security,” says Stephen Heathcote, CEO of PrimeGlobal. “So, what we need to think about is how we bring in firms into our mix that can help our members and their clients but still keep the heart of PrimeGlobal in the [accountancy] profession. This is something that we are looking at and I think we will end up bringing in a wider set of advisory firms that complement our offering. But the core will remain in the accounting profession.”

Looking ahead, Heathcote says that he would hope to see accountancy firms making a big shift into environmental, social and governance (ESG) services. “We will need to start to measure that, and show the value of it,” he says.

But returning to the impact of the pandemic, the attitude of the organisations is best summed up by Mark Saunders, chief operating officer of Integra International, who says: “Covid has been the biggest threat that any organisation has faced for many years. If we have thrived during the pandemic, I cannot see any immediate threats to our future. We will need to remain competitive and responsive to our member’s needs. The only real issue that many of our members are facing at the moment is the lack of staff at all levels as business increases. Recruitment is a major issue.”

And this appears to be a perennial problem for these international organisations, with many reporting the difficulties that their members face in recruiting the talent needed to respond to client demands.

“I would like to see a big shift in diversity, equity and inclusion,” says PrimeGlobal’s Heathcote. “Universally, firms are struggling to keep their people, but they need that wider range of talent. For years, the profession has been male dominated, and when you look at the ratio of male to female partners, it hasn’t gotten much better.

“But the pandemic has absolutely shown we can adopt fully flexible working, we can allow for different paths for different individuals and roles. You can recruit people from different places, and this starts to translate into something more permanent where we can start to see a wide and diverse group of professionals working their way up to the top of our firms.

“This will be a huge step forward for the profession.”

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