ICAEW’s Sole Practitioners and Small Firms in Focus research points to a changing landscape, with consolidation, private equity interest and succession pressures beginning to have an impact. Potential exits among sole practitioners could contribute to further structural change across the sector.
ICAEW’s Sole Practitioners and Small Firms in Focus 2026 research draws on fieldwork conducted in August 2026 and explores the opportunities and challenges facing ICAEW firms with less than 11 principals.
Key takeaways:
- Consolidation and investment: Consolidation activity and private equity interest is more prominent among small firms, particularly those with five or more principals.
- Negative views of private equity: Only 5% of firms believe that the trend is beneficial for the sector overall.
- Potential exit: More than half of sole practitioners are considering exiting the profession, driven mainly by retirement and growing regulatory demands.
Consolidation activity
Consolidation activity is reshaping the wider accountancy market as firms explore acquisitions, succession options and external investment. Opinions on the likely outcome of this activity are divided.
One-third of respondents (32%) believe that, by 2030, a more polarised market will be created with fewer large firms, more small firms and a diminished middle. 21% disagree with this perception of the future. 47% take a neutral view or are unsure.
Current and intended merger and acquisition (M&A) activity among sole practitioners and small firms remains modest, although it increases with firm size. Small firms with five or more principals are the most active in this area.
Small firms with five or more principals also attract the greatest interest from private equity investors. Among this group, 82% have been approached by an investor, while 18% consider private equity investment to be a future option.
Private equity interest declines with firm size. Sole practitioners are the least likely to have been approached by investors and the least inclined to pursue private equity investment.
Nevertheless, private equity's influence on the wider profession is notable, with 13% of sole practitioners and 30% of small firms ranking it among their top three macro trends.
Views of private equity are largely negative across all firm sizes. More than half of respondents (53%) disagree that private equity investment benefits the sector overall, compared with just 5% who believe it does.
As a small practice, I believe consolidation and private equity investment will continue to influence the accountancy sector. However, there will remain strong opportunities for smaller firms that provide personalised service and strong client relationships.
The future for sole practitioners
Overall, 53% of sole practitioners are considering or already actively pursuing a sale (either to another firm or an individual) or another route to winding down or exiting their practice, compared with 33% of small firms.
Most remain at the consideration stage, with their plans are not yet final. There is also considerable overlap between those exploring a sale to an individual and those considering a sale to another firm, suggesting many are keeping their options open.
Retirement is the main driver, cited by 85% of sole practitioners considering or pursuing an exit, while 44% point to the complexity and volume of regulation. One-third cite both factors, underlining how regulatory pressures may be reinforcing existing succession and retirement plans.
The ever-increasing deadlines for small practices to deliver compliance are creating significant stress in the industry to such an extent many senior accountants are leaving/selling up and there are less newly qualified wishing to become partners due to the impact of stress and work life balance.
Consolidation and private equity investment are important drivers of change, with some smaller firms likely to be acquired by larger practices and consolidators. However, the future of the profession will not be determined by these trends alone. As a new generation of entrepreneurial business owners emerges, demand for the trusted, personalised advice offered by smaller firms is likely to remain strong, ensuring they continue to play a vital role in the market.
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