Small firm versus big firm – the client decision

Following on from an earlier post, small firm versus big firm – the employee decision, it only seems right that I cover the client side of the equation. Hopefully this post gives some insights into the client experience at the various types of firms, which should then assist readers in making a decision about which size firm is right for them…

Pond & Fish

Many people in the online personal finance community don’t have a lot of exposure to accountants, with plenty of posts spruiking the benefits of doing your tax yourself. This of course makes sense for a lot of people, simply because the affairs of individuals, even high net worth individuals, need not be that complicated, but for some people, especially those in business, it can make sense to use the services of an accountant.

There are of course plenty of accounting firms out there to suit everyone’s requirements, but with a bit of advance knowledge you can save yourself a lot of time and money by picking the right sized firm for your needs.

What sorts of firms are out there?

As I explained in the earlier post on big firms vs small firms, I would classify the various firms out there into three broad size categories, these being:

  • Big 4 firms
  • Mid tier firms
  • Small firms

I’m not going to go back through the different players in each of the above groups as I covered that in the previous post, and will instead just go through the pros and cons of the various categories of firms.

Pros and cons – Big 4 firms


  • If your affairs span across different countries, you can usually get a much better service from using multiple offices from the same big 4 firm than you would from just using unrelated firms in the two (or more) separate countries in which you have financial business.
  • They tend to attract a higher proportion of high performing people with high levels of expertise, so there’s a good chance that you will be able to access the skills and knowledge that you might need, especially if your affairs are complex.
  • Big 4 firms will be located in flashy offices in the most prominent CBD locations in major cities and regional centres, so if this is something that’s important to you then you’ll feel good about getting royal treatment. I’ve been into some offices that have on-site baristas and catering staff (wearing the full formal uniform of expensive restaurant waiters), and while I thought it was a bit of a wank, there are some people that like this sort of thing. I’d probably just be thinking that this is where all of my fees were going!


  • The Big 4 firms tend to be very expensive, especially if you’re a small business or individual without a very high net worth or complex investments. Be prepared for very high hourly charge rates, and they’ll charge you for everything that they do for you without a second thought.
  • The Big 4 firms are focussed mainly on audit engagements, so their private client teams tend to be relatively small (perhaps only 10-15% of staff). If you’re a private client and not a medium-large business (as most people are in the FIRE community) then you’ll really only be dealing with a relatively small portion of the firm, and this division is often the same size or smaller than many mid-tier firms who are predominantly focussed on private clients.
  • With their significant focus on the provision of audit services, many of the add on services that a private client might want (like financial planning, insurances and lending) are not permitted, and you therefore need to head elsewhere for these services. This is because it is seen as a conflict of interest to provide these services when you might be auditing the same businesses or large businesses from the same industry sector.

Pros and cons – mid tier firms


  • Where the Big 4 firms are dominated by audit clients, the mid tier firms give much more weight to private clients, which means that potential early retirees might be better suited to them.
  • Mid tier firms don’t have the same conflict of interest issues as Big 4 firms, and they’re therefore more likely to offer a wider range of services including financial planning, risk insurances and lending/finance. This allows them to be more of a “one stop shop”, which can result in a more seamless service than using multiple service providers who may also have competing interests.
  • Mid tier firms have noticeably lower hourly charge rates, although they still aren’t cheap. Even so, their rates provide a better balance of cost vs service than the Big 4 often provide.
  • Mid tier firms are a logical next step for those wanting to get out of Big 4 or simply not being faced with the opportunities (e.g. being blocked to partner because there is no more room at the inn). They therefore still have their fair share of high calibre people, and have great access to the expertise that you may need if your affairs are complex or span across international borders.
  • Still have an international network of firms in most major countries, perhaps not as well developed as in Big 4 though.
  • Mid tier firms still have relatively flash offices in prominent CBD locations, but they won’t be as over the top as some Big 4 offices. This means that you’re not paying all of your fees for some of those flashy services, and is one reason why the fees tend to be lower than Big 4.


  • While they are part of international networks, the offices in different countries may not work together as well, often because the firms are completely independent and are a group only when it comes to branding, systems and processes. You’ll still get the job done, it just may not be as seamless as in Big 4.
  • Because of the reduced size, not all mid tier firms will have all services in them, especially in the smaller offices. In these instances, you’ll probably work with another office, which can be a bit annoying but if your local adviser handles it well then it doesn’t need to be a big issue.
  • While the fees tend to be lower than Big 4, they’ll still be quite a bit more than smaller firms, so if your affairs aren’t that complicated you may be frustrated at the level of your fees.
  • Because the mid tier firms aren’t as established as the Big 4, there tends to still be some movement in these firms in terms of their networks. This can mean that a firm might all of a sudden change networks, or the network that they’re in may decide to change its name slightly. This can shake the confidence of clients, but it is usually a change in appearance only.

Pros and cons – small firms


  • Low fees – this is where you’ll find the lowest fees of all. For aspiring early retirees low fees should be a very important consideration, as long as you are getting the job done correctly! If they’re messing things up, you could be paying the price for a long time!
  • Smaller firms tend to have more consistent staff, and this means that you’ll probably work with the same service team year after year. I actually think that this is a really good thing from a client perspective, as it allows you to build a relationship with these people and the trust that goes with it, plus you don’t have to keep explaining things to the new person like you do at the Big 4 where there can be a revolving door of staff handling your affairs!
  • These firms generally provide a more personalised service, with less focus on billable hours and fees and more focus on making sure that the client is happy (including with their fees!).


  • Small firms don’t always have access to technical information, and you may therefore run in to trouble with complex issues, although they won’t always tell you that they don’t really know how to deal with your problem. This isn’t usually an issue if your affairs aren’t complex, and if you’re avoiding all of the bullshit fancy investments that big investment banks like to sell you, then your affairs should be quire simple.
  • Smaller firms may not always be across all of the changes in technology, with some smaller firms having only a basic understanding of some of the more common software packages. While cloud accounting packages (Xero, Quickbooks Online, etc) have taken the accounting world by storm in recent years, there are still plenty of smaller firms that may only have experience with one (or none) of these packages. If you’re not operating a business then this may not be such a big issue, but if you’re using some fancy software like Personal Capital, Mint or another similar package then don’t expect your small firm accountant to know how to use it too!
  • You won’t usually get a flashy office with a small firm, but that doesn’t mean that they’ll be located out in the sticks. Plenty of small firms have offices in the CBD, but they may just have smaller suites in larger buidlings rather than actually having the naming rights to a tower! Some smaller firms are actually located out in the suburbs, which may not suit if you don’t live anywhere near that, but choosing a firm that is close to you (if you want to deal with them face to face) should be a consideration if you don’t want to waste forever travelling!
  • The departure of a key staff member from a smaller firm can be a big issue, and may change the whole dynamic of your relationship with them. With a mid tier or larger firm, they’re more likely to have a person of similar skills and experience to step into the shoes of the person that’s gone.

So which one is right for you?

This of course depends on how your affairs are structured, but if you’re an aspiring early retiree or running your own small to medium sized private business, then I would say that the mid tier firms are as big as you should go.

If you’re just starting out and really don’t have much in the way of assets, then you’re probably best to start with a smaller firm. In the early stages things are more about saving rather than complex advice (unless you get fooled into thinking that complex advice is a substitute for saving), but if your affairs do become more complex (e.g. with self-managed superannuation funds and beyond) then you might want to make the move to a mid tier firm at some stage. There are still plenty of smaller firms that can meet the needs of even quite wealthy individuals.

I also think that the personalised service and lower fees of the smaller firms make them particularly attractive for people in our online FIRE community, but you just need to make sure you ask around and pick out one that’s actually good as there are plenty of dud small firms out there.

If you have any thoughts on the client decision (big firm vs small firm) then I’d love to hear them. Do you even use an accountant on your FIRE journey or do you just look after everything yourself?


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