PracticeAccounting FirmsSuccession devastates firms

Succession devastates firms

A partner succession crisis is looming in the accountancy profession, which could see more than a quarter of independent accountancy practices disappear, according to a new survey.

Link: Adviser: Smoothing the path to succession

The study, from Kato Consultancy, found that a lack of new talent and funds to pay off retiring partners meant that 28% of the 200-plus firms questioned felt a sale or merger was the only long-term option for survival.

‘Over the last 15 years, nine of the top 10 firms have disappeared and 38 of the top 73 have gone the same way,’ said Kato director Phil Shohet.

‘This trend will continue unless there is a sea change in the way that firms are run.’

The issue, brought about by a lack of succession planning, could cause immense damage to the profession as clients are faced with less and less choice over time, said Shohet.

The survey revealed a high number of partners in their fifties, due to retire in the next 10 years, with few partners available to replace them.

Shohet added that short-term thinking and a lack of business experience from partners meant that many firms were too unprofitable, resulting in the inability to pay off retiring partners.

He suggested that practices start looking outside of the profession for ‘real businessmen with an entre-preneurial flair’.

Related Articles

Johnston Carmichael CEO appointed as ICAS president

Accounting Firms Johnston Carmichael CEO appointed as ICAS president

3w Emma Smith, Managing Editor
British Accountancy Awards 2018 – entries open!

Accounting Firms British Accountancy Awards 2018 – entries open!

1m Emma Smith, Managing Editor
Is the accountancy sector facing an international talent crisis?

Accounting Firms Is the accountancy sector facing an international talent crisis?

1m Lewis Silkin
RSM appoints new Chief Operating Officer

Accounting Firms RSM appoints new Chief Operating Officer

1m Alia Shoaib, Reporter
RSM announces 11 partner promotions

Accounting Firms RSM announces 11 partner promotions

2m Emma Smith, Managing Editor
BDO hires former AstraZeneca creative director as head of digital and innovation

Accounting Firms BDO hires former AstraZeneca creative director as head of digital and innovation

2m Emma Smith, Managing Editor
What does the future hold for listed accountancy firms?

Accounting Firms What does the future hold for listed accountancy firms?

2m Fergus Payne, Lewis Silkin
EY, Deloitte lead Big Four in gender pay gap reporting

Accounting Firms EY, Deloitte lead Big Four in gender pay gap reporting

3m Emma Smith, Managing Editor