The underlying factors that are influencing new accountants include concerns about valuations, lack of cash flow, not wanting to be equity owners and other lifestyle priorities, according to chief executive of Connect Financial Services Brokers Paul Tynan.
“Basically, they are generally more comfortable receiving a salary, leaving the stress of matters relating to staffing, marketing, cash flow, etc in the hands of practice owners,” Mr Tynan said.
“Conversely, there are a growing number of business owners that are reluctant to offer equity as they have come to the realisation that new entrants and potential partner/successor candidates are far from being rainmakers and lack the capacity to generate revenue, if any, for the practice,” he added.
Mr Tynan drew attention to the recent Bstar 2015 Accountants Research Report, which found there had been a 39 per cent increase in concerns relating to practice succession.
The report also found 69 per cent of accountants do not have a formal succession plan in place, Mr Tynan said.
“However, while time is still on their side, accountants can grow and improve the value of their businesses by leveraging from the benefits to be derived from restructuring their practices to meet the challenges of a new, dynamic financial services marketplace,” Mr Tynan said.