We’ve all seen the headlines about industries that are being disrupted by younger generations, from millennials changing the way the housing market moves to Gen Z demanding more “realness” from brands. Each generation leaves its mark on the way things are done – and accounting is no different.
As the next generation of financial and tax professionals rises through the ranks, and begins building and running their own practices and firms, I expect to see big changes, especially in the balance between compliance and advisory services offered. The new generation brings different values and skills to the table than those who came before. They will take a unique approach to building and, increasingly, running their own practices that will cause a shift in the way the industry operates, for the better.
For a long time, the model in accounting has been compliance-first, with firms long focused on providing their clients with accounting and tax preparation, often neglecting to deeply develop their advisory capacities. Recently, many firms have begun to recognize that much of the work that they are already doing falls into the advisory category, and is, in fact, more valuable to their business and clients in the long run. As the industry begins to pave the road to an advisory-first model, I expect to see the younger generation hit the ground running.
This next generation will have a range of factors working to their advantage. The compliance first model is ripe for disruption, and our profession has space for talented young professionals leaving Big Four firms to branch out and build their own practices from the ground up. These new practices, targeting clients who value deeply engaged advisors, will have less to lose from mixing up their models, or experimenting with new services and offerings than established firms. Legacy firms may have owners and clients more resistant to change, or lack the capacity and patience to test new services. The flexibility of younger firms to fine tune their advisory capabilities through trial and error, and “try on” a wide range of skills before narrowing on what they do best, and, just as critically, who they want to serve, will be a competitive advantage to build advisory first firms.
In addition, many are embracing technology at an unprecedented pace, streamlining and automating previously very manual processes. Integrating technologies, such as cloud platforms and artificial intelligence, will help drive the move to advisory-first models by allowing tax professionals to engage seamlessly and in real time with clients. Cloud technologies, in particular, can provide a space to do the kind of long-term planning needed to stay one step ahead of client needs, and provide better, more advisory-focused services throughout the year.
In addition to logistical and technological changes that the younger generation is making, they simply work differently. This comes through in several ways, including how they recruit and retain clients. This up-and-coming generation is much more versed in social media, and uses it more naturally to conduct their business lives, as well as their personal ones. Not only can they tap into new potential client bases, but also meet this base where they are. Tax professionals can engage in real time, provide tips, thoughts on industry news, and more to build trust and showcase their expertise. This, in turn, helps evolve client relationships from short-term or compliance-only business to longer term, advisory-first partnerships with the next generation of heavy-hitting clients.
Beyond finding clients, social media provides limitless opportunities to network, swap best practices, and do the kind of collaborative work that previously was only conducted over lunches or happy hours with close colleagues and friends at other firms. New firms will be able to evolve faster, hone their skill sets more finely, and deeply tap into the pulse of what is cutting edge. I expect this to provide a space for professionals to share their journey toward building advisory capabilities and help turn the tide for the industry as a whole.
Advisory-first practices are not just about improving the bottom line or vying to be on the cutting edge; they’re also better for the tax professionals behind them. It’s no secret that the work life balance in this industry isn’t great. Long hours, hundreds of clients, compressed workflows, and tight deadlines are the norm and don’t allow for much of a life outside of work. Unlike generations before who were dedicated to the idea that working longer and harder is the only way to succeed, this generation, in general, is determined to carve out a balance that not only allows them to have a life outside of the office, but also to focus the time they do spend in the office on truly meaningful work.
Advisory-first models naturally lend themselves to a more narrow client base, with tax professionals providing more service to fewer clients instead of the other way around. This approach requires more specialization and higher-touch client relationships – providing tax professionals with the work-life balance they need and ultimately driving up the bottom line.
The industry is ready for change. It’s hungry for new talent – professionals who embrace new technologies, understand new social norms and self-marketing, and who are ready to take a step back from the endless grind and focus on quality over quantity. They are making changes now, at the ground level and in emerging firms, that will eventually turn the industry focus to providing advisory-first services. This model will not only enable firms to focus on higher quality, more personalized service, and changing the role tax professionals play in people’s day-to-day financial decisions, but also will change the lifestyle that tax professionals can expect for themselves. I think it’s time for this change and can’t wait to see how it plays out in the near future.
Editor’s Note: This article was originally published by Accounting Today.