Holding families to account

By David Bain

Accountancy firms like family businesses. After all, family businesses offer scope for them to charge lucrative fees across a host of disciplines for both the business and the family. And as long as these fees aren’t too high and trust is established, accountancy firms can build up lasting relationships between themselves and business principals.

But family businesses also get to benefit from this relationship, not just from the obvious audit and tax expertise, but also from extremely useful strategic advice such as if and when to sell the business, how to handle succession and transitional planning, and whether or not to bring in senior managers from outside of the family. As Marnix van Rij, who heads Ernst & Young’s personal tax services in Europe, says: “Strategic advice from a good accountant can sometime make the difference between success and failure at a family business.”

That said, the relationship between the two groups can often be fraught. Indeed, family businesses can sometimes struggle to find accountants that understand the unique qualities of family firms. Alex Sharpe, a consultant at the London-based family business consultancy Peter Leach, says there can often be a misunderstanding between the two when it comes to the main objectives of the business. “Decisions are not always made on a commercial basis alone,” she says. “Families often make strategic choices for reasons other than increasing shareholder value. For example, starting a new venture for the benefit of a family member, or a community-based initiative that has little to do with the commercial imperative.”

Sharpe goes on to add that accountants and other professional advisers need to understand the subtleties of each family’s motivations so that they can properly serve them and offer advice that fits with the family’s vision.

Where tensions can arise is in the area of estate planning. Here accountants will more than likely be driven by maximising tax efficiency, but this might not be conducive to harmonious relations within a family, or what a family member is aiming to achieve. For example, a family member working in the business, acting on the advice of accountants, passes down his or her shares to their children.

But, as a result, he or she no longer receives dividends and realise they don’t have enough income to sustain their lifestyle without remaining in the business. Sharpe says this can mean that family members can remain in the business longer than they should, frustrating management and creating inefficiencies. Given this potentially problematic issue, Sharpe says families need to set the parameters clearly if they are to avoid such problems. “It is extremely important for families to be clear about their personal vision for their wealth before they undertake any tax planning so that the result is consistent with what they want to achieve from a family perspective but is also tax efficient.”

Whatever the difficulties between the two groups, there is no shortage of accountancy firms pitching their services to family businesses. “Accountants see that forging close relationships with family businesses is a good idea,” says Sharpe. “With the tenure of a family business chief executive being approximately 20 years, and for a non-family business equivalent four years, it is possible for them to forge long-term close relationships with key decision-makers.”

Family businesses can chose between large or small firms, those with global reach and those with local knowledge, and those with a host of other services available like legal and fund management, and those more specialised. In fact, sometimes the huge variety of choices available can often make the decision daunting.

Unlike their counterparts in terms of size in the legal profession, the Big Four professional services groups – Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers – all provide services to family businesses. Indeed, the four have been promoting this aspect of their work more actively in recent years. That may be because they provide more of a steady stream of fee-income than public companies. And there is little doubt that the Big Four can provide unrivalled expertise in audit, tax and advisory work.

Among the Big Four, Ernst & Young says it has forged many long-term relations with family businesses over the years, and the fact that it serves more than 90% of the businesses represented on Campden FB’s annual Top 50 Family Business Leaders survey suggests it has wide influence within the family business area.

“Family businesses often have a very strong vision and are highly demanding – you need to be prepared to offer much more than technical advice,” says van Rij. “If you get it right, you can have lasting relations with these businesses. Family principals tend to last longer in their positions than their listed counterparts.”

Competitor PWC says part of how it engages with family businesses is by producing a global survey on the sector. Released last November, the firm says it spoke to more than 1,600 family-business owners in 35 countries to compile the list and adds that it has many of them as clients. Deloitte says it conducts regular surveys on family business issues and trends. KPMG says it also carries out similar surveys and adds that its business advisory unit, which deals with family businesses, has grown rapidly in recent years.

No doubt the Big Four can offer a depth and breadth of knowledge to family businesses few others can match, but just like banks and law firms, many family businesses prefer smaller accountancy firms. One family business leader who wanted to remain anonymous says this might be because smaller firms can often be more flexible and entrepreneurial in their approach. “They (smaller firms) often approach the relationship from a more entrepreneurial perspective and will be less prescriptive in their advice – this fits into our way of working with professional services groups.”

Saffery Champness, a mid-sized accountancy firm based in London that specialises in private client work, says that much of what it does is related to family business work and reckons it has established excellent relations in the sector. “Working with family businesses is more than half of what we do,” says Ronnie Ludwig, a partner at Saffery.

“Advice to such businesses always has to be on a bespoke basis and our view is that we can do this well because of our size and expertise.”

Unsurprisingly, Ludwig also says firms like Saffery can compete much more on fees than the Big Four, which he adds isn’t to be laughed at in these economically tougher times. “All accountancy firms are seeing their fees come under more scrutiny in recent years, but it’s somewhat easier for smaller firms to adapt to this squeeze on fees than it is for the larger ones.”

This “size isn’t everything” view of the relationship between accountancy firms and family businesses is borne out even more in continental Europe than the UK, says experts. A Swiss-based family business principal told Campden FB that his firm has always preferred using a local professional services group rather than a Big Four provider.

“Local firms can tailor-make their services more to businesses like ours,” he says. “But there will always be a need for accountancy firms in all shapes and sizes.” Rödl & Partner in Germany and BK Services, an accountancy spin-off from Zurich law firm Bär & Karrer, are often mentioned by continental family businesses as having excellent family business expertise.

Campden looks at the top 10 accountancy firms for family businesses (in alphabetical order):

BDO International

The fifth-largest accountancy firm in the world, BDO International, is a worldwide network of public accountancy firms. In the UK, BDO engages with the sector through its Centre for Family Business, a long established organisation focused on advising family-owned businesses and the families behind them. Many of the heads of this group have gone on to work within other organisations giving the Centre a useful alumni to pull on for expertise. In Germany, BDO Deutsche Warentreuhand works with many of the country’s Mittelstand family businesses. The accountancy firm also produces a number of guides on family businesses and helps on succession and governance issues.

BK Services

A subsidiary of Zurich-based law firm Bär & Karrer, BK Services often gets mentioned by family offices as a top choice for accountancy services in Switzerland. BK Services is by far the smallest firm on the list with less than 10 partners working in the business, but it doesn’t see this as a handicap. Works closely with its legal partners to provide a full-service professional services offering for family businesses and family offices. Because of its size, BK Services says it is very flexible and is able to provide a bona fide bespoke service for family businesses. Also has good links with a host of international firms.


One of the Big Four professional services firms, Deloitte has many relationships with family businesses across the world and has built up these relationships over considerable time. Deals with family businesses through its private client advisers unit, which has a subdivision called private company services. Family businesses talk highly of the work the unit does. Deloitte can also pull on its huge global network of staff – it is the biggest private professional services organisation in the world, with more than 170,000 staff. Consequently, Deloitte can provide the full gambit of advisory services from audit to restructuring.

Ernst & Young

Ernst & Young has been very successful at growing its family business clients through years of experience and expertise. It has huge coverage – out of Campden FB’s Top 50 Family Business Leaders survey, E&Y has more than 90% of them as clients. Although big in developed markets, E&Y has been increasing its links with family businesses in emerging markets and works with many first generation family businesses, which have, as the firm says, a dynastic will. The firm also works extensively with family business organisations to promote and support the family-owned business model worldwide. Also works with entrepreneurs and has an internationally recognised Entrepreneur of the Year program.

Grant Thornton

The UK-based professional services group has an extensive global network and can pull on a staff of more than 30,000. It has a privately held business services unit, which includes a division committed to helping family businesses. Among other expertise, the unit gives advice on succession and transaction planning. Indeed, it prides itself on succession planning advice and produces regular publications on this crucial part of family business management. Also supports research and academic thought leadership on family businesses at a number of universities around the world.


Like its rivals among the Big Four, KPMG can provide unrivalled expertise in audit, tax and advisory services for family businesses. The firm conducts numerous surveys on family business trends and issues to better inform itself and the outside world about the sector. KPMG also sponsors a number of family business conferences throughout the world every year, including a summer school in the UK for those running family businesses. Has considerable firepower to pull on, including 130,000 staff worldwide. The firm also promotes the sector through its Enterprise Centre for Family Business.


Last year PricewaterhouseCoopers brought out its second global family business survey, which is universally viewed as one of the most definitive pieces of research on the attitudes and issues affecting family businesses. Whatever else it is, the survey is certainly extensive, with PWC surveying more than 1,600 family business owners in 35 countries. The UK-based professional services group with more than 160,000 staff worldwide also works closely with the Family Business Network and its various chapters around the world. The group says it has relations with many of the world’s top family businesses.

Rödl & Partner

Germany-based Rödl & Partner can rely on extensive tax and audit expertise, but also on in-house lawyers to provide a total package of professional services for family businesses. Recommended by German family businesses as one of the best in the business – it has more than 20 offices across the country – and has extensive relations with a host of prominent family-owned firms in Germany and beyond. But it has also been expanding its international business in recent years and has offices in most of the main European cities. Also hosts seminars and meetings on family business issues, and works closely with many of the private banks.

Saffery Champness

The firm’s longstanding private client expertise and its highly developed business advisory capability combine to create a very comprehensive service offering to family businesses. Saffery provide businesses with specialist financial, tax and compliance advice from a corporate perspective whilst taking into account the tax and financial implications of any decisions on shareholders and directors, thereby ensuring an integrated process that best serves the interests of the business, its managers and its individual owners and their families. Saffery has plenty of experience – the firm has been around for more than 155 years.

Smith & Williamson

Smith & Williamson is unique in that it provides expertise in accountancy as well as wealth management and private banking. This combination of services often makes it a popular choice with family offices, but it has also gained a reputation as a top accountancy firm among family businesses. Because of its asset management expertise, Smith & Williamson is able to offer considerable financial advice and works with a big cross section of UK family offices. Can provide a host of services for family businesses including advice on succession and governance.