Alan Healy: The quiet takeover of rural Ireland's accountants and advisers

Some of the buyers are foreign, some are backed by Irish investors, and some are Irish firms run by their founders.

A string of Ireland's provincial towns and suburbs have seen a repeated pattern in recent months, with local and long-standing accountancy and financial advisory firms being snapped up by larger entities.

In Ballincollig, Bandon, Charleville, Tralee, Waterford and the South Mall, local practices are being bought and folded into national or international groups. A dozen deals have taken place since March, more than half in Munster.

Some of the buyers are foreign, some are backed by Irish investors, and some are Irish firms run by their founders. Where the money comes from matters less than what happens to the firm. Decisions, branding and strategy move from the town to a head office. 

The announcements all promise the same thing: continuity, the same quality service, the same office, but over time the practical questions are who sets fees, who decides which clients are worth keeping, and whether the partner who knew the family business for 30 years is still there in five years.

It is easy to see why such small practices attract the interest of a larger group when you look at how an accountancy firm earns its money. Most of it comes back every year. 

Tax returns are due every year, payroll runs each month, and annual accounts must be filed whether the economy is growing or shrinking. For an investor, that predictability is the attraction. Because so much accounting revenue is recurring, it can support the cash flow and debt capacity needed to finance acquisitions.

The second attraction is how fragmented the market is. Ireland has hundreds of small practices, each with a few partners and a loyal client base built over decades. Across Europe, private equity has repeatedly targeted markets like this, where firms are fragmented and serve mainly SMEs. Buying them up one at a time is slow, but it isn't difficult.

The third attraction is the one the buyers are most open about. When Cardinal Capital invested in HLB Ireland last year, its advisers at Clearwater described the move as part of an ongoing consolidation of the Irish SME accountancy market. They listed the reasons: predictable revenues, strong client relationships, rising regulatory demands, and "growing opportunities to cross-sell services to both businesses and its owners". Cross-selling is a major attraction. The accountant who does your books knows your turnover, your pension position, and whether you're thinking about selling the business. For a group that also sells wealth management, pensions, insurance or IT services, that relationship is worth far more than an audit fee.

Consolidation in any industry raises the same concerns. In finance, it can result in clients having less choice and less power over fees. There is a conflict of interest when a group doing a business's books also sells pensions, investments or insurance. Then there is local knowledge: the partner who has known a family business for 30 years understands things no central office can.

Almost none of these deals come close to the €100m turnover threshold that triggers a review by the competition watchdog, so none will ever be examined.

It would be easy to cast the sellers as victims or as people cashing out. Most are neither. For many, selling is the only practical way out. Many local practices were founded decades ago. Founding partners are near retirement and often have no successor.

The job has also changed, and businesses must comply with a greater list of requirements. Cybersecurity, gender pay gap reporting, funding, technology and AI are creating demands that he said can often extend beyond the expertise and capacity of traditional smaller practices. Across the advisory sector, owners of firms built over decades are dealing with succession while regulatory, compliance and technology costs keep rising. For a practice in a county town, keeping up with all of that may no longer pay.

There is an irony that the local accountant is the person Irish SMEs turn to when they plan their own succession, whether to pass the business to the next generation, sell to a competitor, or let the management team buy it. Now the accountants are working through the same problem, and many are selling to an outside buyer.

Provincial Ireland has seen this before. Over the past decade, the local insurance broker went the same way, with multiple acquisitions taking place across the country.

We know how to mourn the loss of a town's independent businesses. When the last family butcher, or a pub, closes its doors, it attracts headlines and often becomes an election issue.

The accountant's office on the main street and the financial adviser upstairs rarely get the same attention. But they matter at least as much to how a local economy works.

We have spent years asking who will pull the last pint in rural Ireland. We might also ask who will do its books.