GROWING polarisation between a handful of accountancy “mega brands” and the rest of the profession is threatening the services provided to Scotland’s smaller businesses, the head of a practice has warned.
Richard Gibson, managing director of Haines Watts in Glasgow, believes the accountancy needs of SMEs are at risk of being squeezed due to changes in the make-up of the sector in Scotland.
He also argues that in a global economy owner-managed firms are finding it increasingly difficult to hold on to the talented staff able to go on to succeed the owners of the business.
Gibson said the landscape of the sector in Scotland had changed dramatically in the past 30 years.
“There was then a reasonable cluster of larger firms, perhaps around ten, who serviced the market for larger companies, including the large listed community at that time in Scotland. Separately, there was a large and close-knit community of owner-managed accountancy firms whose market was owner-managed local businesses,” he said.
“Now we have the Big Four who focus on audit and specialist services for large corporates, have the resources to deal with complex regulatory matters and are multinationals in their own right.”
Gibson said there were also national firms targeting the Big Four who wanted to hold on to the SME market.
“For Scotland, which is an SME economy, this gravitation by the large firms towards size and scale means business owners in Scotland are increasingly facing a diminishing pool of resource and talent focused on the SME community,” he said.
Gibson also said the “backbone of firms that service the SME community” was finding it increasingly difficult to attract and retain chartered accountancy students post-qualification.
“A majority of students train with the Big Four and then, understandably in a global economy, many want to travel abroad or move into industry and commerce,” he said.
“Thirty years ago there would have been a ready pipeline of talent coming through a firm and taking on a partnership. Now that is increasingly rare, with talent not only moving out of the profession, but those staying are reluctant to take on the challenges of owning an accountancy business.”
Gibson said to be sustainable the profession needs a following generation willing to succeed the current generation.
“That pool of new owners is drying up, and is another trend that will drive consolidation, and in turn reduce the resource and talent available to SMEs,” he added.