A Private Equity Fund Bought Your Accounting Firm: Now What?
As private equity moves into the financial services space, clients should be proactive and not afraid to push for the answers they need.


With one in three accounting firms set to be at least partially owned by private equity funds, it’s likely that changes are coming to the accounting industry. And as new management shakes up how these firms operate, clients may find themselves struggling to navigate what these changes mean for their relationship with their accountants.
Because that client-accountant interaction is often so personal and financially intimate, here’s what clients need to understand about private equity’s (PE) push into accounting firms and what they may need to consider related to it.
Why is private equity suddenly interested in accounting firms?
Private equity has long been an industry whose acquisition targets move in waves. A few years ago, for example, fitness centers and gyms were all the rage for PE funds; more recently, funds dumped millions of dollars into health care and tech companies. The accounting industry M&A wave is part of a broader focus by PE funds on the financial services industry, which has included a wealth management firm buying spree, and has good investment logic behind it.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Accounting firms have largely been privately held and have steady and stable client bases and income streams. Tax and audit work are metronomically reliable income generators for accountants, and nothing in those functional areas is getting simpler.
What’s more, PE funds work hard to drive their return on investment through both earnings growth and financial engineering. The steady cash flows allow some measure of debt financing for acquisitions, and most accounting and wealth management firms have untapped potential to scale and drive efficiency.
Smaller accounting firms generally lag in the deployment of sophisticated technology for their operations and so have opportunities for efficiency improvements. Their marketing tends to be low-intensity and sporadic, creating real revenue upside. And the number of smaller firms that can be added onto acquisition targets to a PE firm’s “platform” company means that a roll-up strategy can be very effective.
With significant barriers to entry in the form of strong client relationships and a growing shortage of trained CPAs in America, the industry has become a very attractive target. So, PE’s presence in the accounting industry is likely here to stay.
What's in it for firm leadership?
The payday and the promise of more. When PE firms focus on a sector and start competing for acquisitions, earnings multiples to buy a company in the space tend to rise sharply.
It’s hard to get a clear picture of the exact EBITDA multiples PE firms are paying to buy into accounting firms, but the liquidity opportunity from this wave of acquisitions is widely considered to be more robust than the industry has seen before.
Alternatively, for owners who have been looking to grow their firms, PE firms tend to love founders who stay and drive investments in new acquisitions to complement their existing firm. There can also be synergies from outsourcing, technology and cross-ownership of accounting and wealth management firms.
Professional services firms have also long struggled with succession, and PE can play a big role in that. As owners of these firms age out, PE firms are more than happy to provide capital to allow for generational succession where younger members of the firm buy out older members’ partnership interests.
What clients should understand
Of course, for clients, hearing that your wealth adviser or accountant is now going to be part of some larger umbrella organization inevitably comes with some questions. Few clients are likely to jump at the chance to have their finances managed by some wet-behind-the-ears adviser they’ve never met before. Perhaps in no other area of consumer choices does trust in a service provider’s experience factor in so strongly as around these core personal financial services.
Client concerns shouldn’t be dismissed. Part of PE’s takeover of these firms includes a focus on profitability — one that, at least for some of these firms, could lead to cost-cutting measures that have the potential to undermine the high-touch service clients are used to. Not only is this something for firm owners to be aware of and consider before accepting private equity investment, but it’s something clients should keep their antennas up for, as well.
As private equity moves into the financial services space, clients should remain vigilant and proactive, as well as unafraid to push for the answers they need. Not every firm may be up front about private equity investors they’ve taken on, as there’s no disclosure requirement per se, so clients should be advocating for themselves in starting these conversations with their advisers.
The ownership shift for these firms may lead to changes in service models, adviser availability and overall firm culture, all things that can dramatically alter clients’ experiences.
If you’re a client at a firm that’s been invested in or acquired, you should be clear in setting expectations with your adviser on the services that you are or are not interested in receiving, as well as how they are provided. Often, as growth expectations increase because of PE investors, advisers and accountants will be pressured to cross-sell their clients. Clients can save both themselves and their advisers the headache by being transparent about their needs and expectations, and firms, meanwhile, should be transparent about their ownership structure and their potential implications.
What's next
Private equity’s involvement in accounting and wealth management firms is set to reshape the financial services industry and will continue to drive consolidation as the big grow bigger and older advisers look for the exits. Firm owners and their clients need to be prepared and engaged on questions surrounding what all of this means for the client-adviser relationship to ensure success for all.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Tom Ruggie, ChFC®, CFP®, founded Destiny Family Office, a Destiny Wealth Partners firm, to help clients manage the increasing complexities inherent in their business and personal lives. He has identified three key areas where his firm can make a significant difference: presenting a compelling sphere of investments, including alternative, direct and co-investment opportunities; creating a special emphasis on high-end collectors whose collections signify significant alternative investments; and strengthening the firm’s private trust capabilities. Ruggie has become one of the most respected financial advisers in the industry, receiving national recognition and rankings including: 7x Forbes Best-in-State Wealth Advisors (including 2024; #1 N Florida), InvestmentNews Awards RIA Team of the Year (2024), Forbes Top 250 RIA Firms (2023), Forbes Finance Council since 2016, 12x Barron’s Top 1200 Financial Advisors (including 2024), InvestmentNews Top 75 Fastest-Growing Fee-Only RIAs (2023), 12x Financial Advisor Magazine America’s Top RIAs (including 2024), 3x Family Wealth Report Awards Finalist (2024), USA Today Best Financial Advisory Firms (2023).
-
In Trump’s Economy Should 401(k) Savers 'Set It and Forget It?'
It’s hard to bury your head in the sand when the markets are volatile. Here’s when it makes sense and when it doesn’t.
By Donna Fuscaldo
-
Ten Cheapest Places To Live in Florida
Property Tax Make your Florida vacation spot daily living — these counties have the lowest property tax bills in the state.
By Kate Schubel
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw Back
Tesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
By Karee Venema
-
Bouncing Back: New Tunes for Millennials Trying to Make It
Adele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
By Alvina Lo
-
Early-Stage Startup Deals: How Do Convertible Notes Work?
Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
By Murat Abdrakhmanov
-
Stock Market Today: Stocks Soar on China Trade Talk Hopes
Treasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
By Karee Venema
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
By Jacob Schroeder
-
Can Trump Fire Powell? A Supreme Court Case Could Decide
Presidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
By David Dittman
-
What Are AI Agents and What Can They Do for You?
AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
By Tom Taulli
-
Should You Buy an iPhone Now Before Tariffs Hit?
Looming tariffs can make an iPhone purchase seem urgent. Here's what to do if you need another phone but want to save money.
By Laura Gariepy