The 2025 Tsunami – Is Your Firm Prepared?

By Chris Farrell, CPA.

Firm leaders today have big challenges ahead. In addition to staffing challenges and ever-changing compliance regulations, leaders need to ensure their firms keep up and remain attractive to current and future generations of clients. It’s tempting to rely on familiar tools and processes that have worked in the past, but leading edge firms are taking steps now to understand what’s ahead and ensure that their teams are moving to solutions that will work today AND into the future.

Forewarned is forearmed: The Millennials are Coming

The biggest thing to be aware of is that the actual demographic of most firms’ client (and employee) base will be shifting. This is because by the year 2025, according to Deloitte and many other studies, 75% of the workforce will be Millennials. Instead of being composed mainly of older business owners, many firm leaders will find that the decision-makers at their client’s companies are now younger.  

For context, Pew Research Center defines Millennials as those born between 1981 and 1996.  By 2025, Millennials will range from 29 to 44, meaning they are business professionals coming into their true power professionally.  The biggest implications is that they expect to interact with their firms in very different ways than older clients do.  A secondary implication is that since the remaining 25% of the workforce will be made up of other generations (a mix of X, Boomer, and Z workers), solutions chosen must work across generational demographics.  Ease of use and convenience will be key.

What makes millennials different from other clients?

First and foremost, they are highly entrepreneurial.  It’s not uncommon for a millennial entrepreneur to start and run several businesses, as they are generally comfortable with taking risks. Currently, millennials are the fastest-growing segment of small business owners in terms of starting their own, or acquiring an established business – and in a recession, this only accelerates. Firms that create a great environment for millennial business owners may find that they get several engagements from each owner, and possible referrals as well.

This demographic also has a tremendous amount of power when it comes to spending and making decisions. Millennial-owned businesses have a collective spending power that in 2022 exceeds $150 Billion US.  In the US alone, there are currently more than 78 million Millennials. By 2025 Millennials will be making the majority of B2B decisions including who they choose for their accounting firm.

Personally, they are conscientious, they work hard, and they want all the information to be available at their fingertips.  They shop around and they read reviews. So when they choose an accounting firm, it means they have done their homework and they like what they saw on the firm’s website and in social reviews.

But perhaps the biggest difference between a millennial client and a Gen X or Boomer client is that they are tech-savvy and expect their professional service providers to keep up.  They have little tolerance for outdated technology – especially solutions that they can’t use easily on their mobile devices.  They need solutions that can keep up with their innate drive to HUSTLE.  Mobile access is considered table stakes. They also tend to strongly dislike email and they don’t own scanners or printers.  With this in mind, why are many firms using technology (email + a portal) that was coded in the 90’s to request documents from, and communicate with clients?   

Getting the experience right will be particularly important since Millennials tend to be conflict-averse. This means they may not even tell the firm they are unhappy, and will instead just quietly leave.  In situations like this, firms find out they have lost the client when they get a request from the new firm to send the books over. If this is happening with some regularity, firm leaders should look carefully at the experience their firm is offering currently. Taking a Client Experience Assessment Quiz can help to uncover strengths and hotspots so they can be corrected.

Implications for Firms

The biggest implication is that firms need to pay attention to the experience they give their clients when working digitally with the firm. It needs to be secure, easy and mobile-enabled  For many firms, the digital client experience offered still consists of email and a portal. This approach will not work for clients who are on the go all day with just their smart phone in hand. To be prepared, firm leaders should look for secure solutions that enable the firm to be a seamless part of their client’s days instead of a readblock or speed bump. Mobile is considered table stakes with millennial clients.

Ensuring that tech solutions are modern, secure, and mobile-enabled will go a long way towards meeting the basic expectations of current and future clients.  Accounting firm leaders should take inspiration from today’s Banks.  To compare the effect of an excellent client experience with a poor one, simply think of the digital experience customers get from their banks today, then recall how banks used to serve us. Instead of having to make time to “go to the bank”  modern banking apps have completely reset how consumers work with their banks.  Being able to do everything from an easy-to-use mobile banking app is now the baseline for choosing a bank.  It’s time the accounting and tax profession gave their clients the same modern, seamless and secure experience. 

Security remains a top concern

Another consideration is security.  Moving clients away from insecure methods like emailing unencrypted attachments and texting photos of sensitive documents will be increasingly important when serving a predominantly mobile client base.  Choosing a solution that makes security automatic and seamless will set the firm apart from competitors, while keeping the firm and the client data safe. Look for a solution that uses bank-level security and where all data is encrypted at rest and in transit.

Next Steps

To thrive now and into the future, firms of all sizes should consider the digital experience they offer their clients, and take steps to ensure that they become a seamless part of their clients busy mobile lives, instead of a speed bump or road block.

Millennial clients will choose their firms based on the experience they offer. Liscio is an example of an all-in-one modern mobile “accountant app” that was built from the ground up to be secure and easy to use no matter the age of the client. Firms benefit from having a single source of truth for all client communications, documents, signatures, etc, and everyone can get more work done because of the speed of response and high adoption rates from clients. 

======

Chris Farrell, CPA is cofounder of Liscio, Inc. and serves as its Chief Executive Officer. Chris has more than 25 years of experience in the accounting, finance and software industries. Prior to Liscio, he co-founded and led SpringAhead and Tallie where he served as Chief Executive Officer. He also served as the Chief Financial Officer of Occam Networks, the Corporate Controller of C-Cube Microsystems and as an auditor for Arthur Andersen. He holds a Masters degree in Business Administration from UCLA’s Anderson School of Management and received his CPA license in California.