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Baby Boomers hang up the pencil


Baby boomer accountants have had enough. With an eye towards the exit sign, should these practitioners create an environment fit for the future or cash in?

11th Nov 2019
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“I know first-hand 70-year old accountants who have said enough is enough,” said 2020’s Gordon Gilchrist summing up the plight of the baby boomers at this year’s 2020 conference from Westminster’s QE11 Centre. 

The morning agenda for the 2020’s annual conference focused primarily on the generation gap in the profession. It’s an issue close to the heart of at least half the audience members at the event who raised their hands as being baby boomers. 

The last 10 years have scuppered retirement plans and inflicted some nasty compliance shocks for the baby boomer accountant. Gilchrist charts their woes back to the last economic crash. 

The recession meant interest rates died, annuity rates hit rock bottom, which meant pension funds weren’t giving anything back.

So these accountants clung on and carried on working. “A few years became six, seven and eight years,” said Gilchrist. “And now they are well past what they originally thought would be their retirement date.”

During those years these accountants have weathered GDPR, Making Tax Digital and the general cloud revolution, and add to that elderly care for parents and financially struggling children.

According to Gilchrist, many baby boomer accountants have reached the point where they can’t cope. 

2020 conference

Bullish market for accountancy firms

That’s why Gilchrist encouraged the baby boomer accountants with an eye towards the exit to seize this opportunity. “It’s a bullish market at the moment,” he said. “But the bear market is coming. So if you want to cash in and de-risk, this is the time to do it.” 

And, indeed, it is a bullish market. As Gilchrist noted: “The city has fallen in love with the accountancy profession.” You need not look any further than the shopping sprees from the likes of Baldwins, while the largest accountancy firms in the UK have grown beyond recognition. 

In 2003 the largest firm in the UK was a £500m turnover. But now, Grant Thornton has a £500m turnover while the Big Four are in the billions region. “If you’re in the accounting profession, there is only one way this is going and that’s up.”

The profession has the reputation of being a trusted business which is why Gilchrist has seen “outside money” coming in from private equities and outsourcing Indian operations.  

Opportunity to acquire and transform

More people looking to sell in the next five years than ever before presents a huge opportunity for the rest of the profession. One option, Gilchrist suggested, was to acquire and transform firms that are ten years behind on technology where team members are anxious to change. The well-established sole practitioner is likely to have some very loyal clients who are paying far too much, he said.  

Gilchrist asked the audience to talk to sole practitioners in their local community and ask if they want to “hang up their pencil”. “They can sell-up now and even stick around for two-to-three years and credit their capital account with, say, £0.5m and when they retire they can have that £500,000,” advised Gilchrist. 

For that, they can sell the practice now and nurture the clients and make sure they’re happy for when they want to cut and run. 

Join forces with other sole practitioners

If you’re struggling and don’t have the critical mass to offer services like wealth management alone, another alternative Gilchrist raised was to join forces with another local sole practitioner. 

If you combine for two-to-three years, you’d then have £1m to play with, said Gilchrist. “You can afford to set up a wealth management joint venture because you have enough clients to make that viable. 

“And then you can both pass it down to the next generation or know that you have a wealth management part to our business which could become the single larger revenue stream.”

Create a winning culture

For those baby boomer and generation X practitioners not looking to pack their bags, the resounding issue for the majority of 2020 members over the last 12 months was the lack of accountants coming through to satisfy the recruitment demand.  

Without a compliance shock currently plaguing accountants, firms can now look to remedy other issues within their firms like recruitment and culture which arguably took a backseat during the onslaught of MTD and GDPR. 

Eliza FIlby


The conference programme supported this with a session on creating the right environment and culture. In order to have a practice fit for bright-eyed new recruits, the 2020 team and keynote speaker Dr Eliza Day advised the audience on how they can engage the next generation of business owners and employees.  

Filby used the example of how EY brought in flexible working. The Big Four firm engaged every level of management on trust and responsibility and got buy-in from the older members by promoting how flexible working benefits all generations. 

“The baby boomers in the audience now realise that they have to approach it from an understanding that they’re not the same as the generation X and they're not the same as millennials,” said Gilchrist. 

“So if we want to hire millennials, we need to do recruitment in a slightly different way and position our firm differently. Because people continue to be a number one issue, it's going to get worse.”

Replies (19)

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By Duggimon
12th Nov 2019 09:50

I always feel these sweeping generalisations are vaguely ageist. It's the accountants who are unable or unwilling to carry on learning new skills, methods and processes who are struggling, not accountants aged 55 and over.

There might be a lot of crossover between the two groups but the implied assumption is somewhat insulting to older members of the profession who are coping just fine with GDPR, MTD and other changes.

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Replying to Duggimon:
By ColA
12th Nov 2019 13:25

Yes, having retired at not quite 72 I enjoyed learning something new every day. MTD & GDPR were a breeze but the thrust that rich pickings abound contrasts with news of some of the big 4 shedding partners like autumn leaves.
Sweeping generalisations indeed!

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Replying to Duggimon:
By paul.benny
12th Nov 2019 13:52

Not even vaguely ageist. Completely so.

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By 0098087
12th Nov 2019 09:52

I can't cope and i'm 53. Really feel like i've had enough. For the first time ever I had a client use the F word in an email to me 2 weeks ago, he had to repay his child benefit and he blamed me. He was told last year to stop taking it. He left. And then today we received a PAYE code, which out of decency I passed on..a K code..he phoned and had a go at me. Told him to call HMRC and they'd sort it as he wouldn't have such high income. No further call. Why do I still have to keep taking this. Because we need the money.

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Replying to 0098087:
By Tom 7000
12th Nov 2019 10:03

53, you youngster, wish I was 53... sigh I could run the park run really quickly in those days...

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the sea otter
By memyself-eye
12th Nov 2019 09:56

I've just activated my 5th pension fund and at 65 and 6 months am looking to exit over the next few years. Can cope with but cannot be bothered with all the cr*p we now are faced with. Don't want to let down the few clients I have left though....

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By Tom 7000
12th Nov 2019 10:02

You all missed the Elephant in the room.

Off payroll working will take out 10-20% of all the clients on 01 April 2020. Your Market is now Bear. We know its coming. No ones paying you for clients that are ceasing in 4 months. The loss of income will go straight to the bottom line making a huge cut to the owners income. Firms sell on profitability really, I know the agents say its turnover, but they would say that.

So I expect to see a lot of people giving up in the next 6-12 months as the last dregs of the contractors are dealt with and the principals wonder where their income has gone.

All the firms will come to market at the same time. Right where there are lots of redundancies by those not selling, 3,500 is my guess nationwide.

And you know how supply and demand works.

So if you are sitting on a pile of cash, want to expand and don't mind being a bit ruthless with some redundancies to put restructuring in place, all your dreams may just about to come true.

Otherwise you better have a plan B on what to do when the storm hits.

If you are near the GU postcode and want to beat the rush, let me know , I could be your Plan B :)

Tom McManners

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Replying to Tom 7000:
Norman Younger
By Norman Younger
26th Nov 2019 21:11

Writing as an agent I can advise you that the starting point is always turnover and the due diligence process will drill down to profitability.

Supply and demand does not work as per the economics textbooks state. The mismatch in some areas where demand way outstrips supply does not drive up exit prices , but it does allow for a more optimal match much sooner.

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By FirstTab
12th Nov 2019 10:19

I cope well because I delegate. Also, I offer only compliance services.

Once again, I do not relate to those in the practice advisory business.

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By mkowl
12th Nov 2019 10:24

I must thank Mr Gilchrist - he was actually responsible for me being made redundant 22 and a bit years ago.

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By johnt27
12th Nov 2019 10:37

Interesting thoughts but why buy a client base that likely reflects the demographic of the seller when setting up on your own and growing organically is so easy nowadays.

That's not to say there aren't plenty of opportunities to modernise and increase the efficiency in such a client base but recent history shows that this isn't the route most new practices are taking - merger maybe, acquisition no.

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By Paul Barnes
12th Nov 2019 11:36

"The well-established sole practitioner is likely to have some very loyal clients who are paying far too much, he said."


I don't often see established firms charging too much, in fact nearly always too little, especially for their ling standing clients.

Am I mis-understanding something?

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Replying to Paul Barnes ACCA:
blue sheep
By Nigel Henshaw
13th Nov 2019 07:54

I see well established multi partner firms charging way too much all the time, very rare to see a small sole practitioner charging too much, as you say usually the opposite.

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Replying to Paul Barnes ACCA:
Norman Younger
By Norman Younger
26th Nov 2019 21:12

Such phrases are great headline grabbers and far too sweeping. Like anything there are some people overpaying or rather being under-serviced for what the fee should include.

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Replying to Desert Orchid:
paddle steamer
13th Nov 2019 18:44

Employment is the way to go- 1,092 hours a year inc hols with one employer, circa 110 hours a year inc hols with another , maybe room for say another 200-300 hours elsewhere (though jobs wise four employments is likely enough), no MLR, no firm manuals, no engagement letters, no compulsory CPA (though I do need to keep reading), no paying for textbooks and software (that is the employer's cost) and little demand on my evenings, Saturdays and Sundays etc.

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By wilcoskip
13th Nov 2019 18:44

At the end of the day, we have to remember that 2020 is pushing its mergers & acquisitions division quite heavily.
In fact, they've been pushing this kind of thing for as long as I've been aware of them - 14 years or so now? They're a remarkable outfit, in that they're very good value for CPD, and give out some great ideas, but very few of their predictions for the accounting industry come true.

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Replying to wilcoskip:
paddle steamer
16th Nov 2019 19:39

So really more 1820.

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Jennifer Adams
By Jennifer Adams
17th Nov 2019 09:35

This is what caught my eye...
"They can sell-up now and even stick around for two-to-three years and credit their capital account with, say, £0.5m and when they retire they can have that £500,000,” advised Gilchrist. "... what a great idea!! I'm sure someone would love to pay that for my your dreams! The multiple for selling is 1: 1 remember

My father worked in his practice until he died at aged 84 years - he needed to.. it was his pension as it is mine.

Desert Orchid has the right idea.

Re Off payroll working... most general practitioners can weather the storm as they only have a few of these (as I do) .I have to say that I think MTD for income will be more of a reason for many small one man band practices for reduce/sell/hand over clients.

Looking for a block of clients is a long drawn out process. I started looking about 3 years ago and sourced 4 with due diligence etc before finding one that I was comfortable with.

But if anyone is thinking of selling you cant do wrong than speak to Nicola Hinks of Draper Hinks - she knows everything there is to know about selling and buying of accountants practices.

and no... Tom you cant have my business ):... post code GU21...

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Replying to Jennifer Adams:
Norman Younger
By Norman Younger
26th Nov 2019 21:15

1:1 - not everywhere , you may need to get out and about a bit beyond GU

What is happening is that practices that are not tip-top or got too much baggage are slipping below 1x but good 'uns in the right postcode ( GU anybody ? ) are 1.2x or even a wee bit more with the right agent negotiating

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