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Balancing growth and risk: Strategies for mid-tier accountancy firms

How UK mid-tier accountancy firms can mitigate key risks associated with growth.

02/10/2025 · 5 minute read

UK mid-tier accountancy firms are thriving, with the Institute of Chartered Accountants in England and Wales  (ICAEW)’s 2025 Evolution of Mid-Tier Accountancy Firms reporting universal fee growth across the sector. According to the report, 94% of firms cite revenue gains from new clients, 82% from increased spend by existing clients, and 33% through mergers and acquisitions (M&A). Yet, despite these opportunities, significant barriers remain, threatening to limit growth potential.

Key challenges identified by mid-tier firms include:

  • Skill shortages: 56% of firms cite this as their top concern.
  • Regulatory complexity: 33% of firms highlight this as a key challenge, while 81% say regulatory change affects their operations.
  • Private equity (PE) investment: 86% of firms report being impacted by PE ownership or influence.
  • Generative AI adoption: 64% of firms are already experiencing its impact on their business model.

These factors introduce operational and governance risks that could undermine growth ambitions if not properly managed. Firms expanding services, particularly into areas such as environmental, social, and governance (ESG) reporting, tech advisory, and transactional support, must ensure that their teams are adequately trained and that their compliance frameworks are robust. Without a coherent risk management approach that addresses such changing factors, firms increase their vulnerability to service disruption, advisory errors, regulatory breaches, and erosion of client trust.

Why growth risks demand action

Every mid-tier firm surveyed reported fee growth (up from 93% in 2025). The main drivers were:

  • Acquisition of new clients: The most frequently cited growth driver.
  • Higher charge-out rates: Contributing significantly across firms.
  • Targeted M&A activity: Particularly strong among PE-backed firms:
    • 44% of PE-backed firms cite M&A as their primary growth driver
    • Just 4% of non-PE-backed firms cite M&A as their primary growth driver

The growth drivers outlined above — such as skills shortages, the adoption of generative AI, and evolving regulatory demands — introduce significant risks that mid-tier firms must proactively manage to ensure sustainable expansion. Without targeted strategies, these factors can undermine operational stability, increase liability exposure, and hinder long-term success.

Even in core service provisions, firms need to align growth ambitions with adequate resources. Professional indemnity insurers scrutinise whether staff numbers and expertise have scaled proportionately with income growth, viewing mismatches as key risk indicators. Similarly, macroeconomic uncertainties exacerbate challenges: 19% of firms cite these as their top concern, with 31% ranking them second.

To mitigate these risks effectively, firms should implement tailored risk management approaches. Below are key strategies linked to the primary growth factors:

  • Addressing skills shortages: Invest in targeted recruitment, upskilling programmes, and partnerships with educational institutions to build a resilient talent pipeline. Regular workforce audits can help identify gaps early, preventing service disruptions and maintaining advisory quality for SME clients.
  • Managing generative AI adoption: Establish ethical guidelines, data security protocols, and integration frameworks to harness AI's benefits while minimising risks like bias or intellectual property issues. For deeper insights on AI implementation in mid-tier firms, refer to our previous article.
  • Navigating regulatory changes: Develop robust compliance monitoring systems, including dedicated regulatory teams and ongoing training, to stay ahead of evolving standards. This reduces the likelihood of penalties and enhances client trust in an increasingly scrutinised environment.

If unaddressed, these risks could result in financial losses, reputational damage, and regulatory sanctions, with broader implications for the UK economy given mid-tier firms' role in supporting SME productivity and innovation. Robust risk management is thus essential to protect growth trajectories and bolster stakeholder confidence.

How Marsh protects your firm

Marsh’s Financial and Professional Liability (FINPRO) division provides tailored solutions to secure your firm’s growth, mitigate risk exposure, and protect both leadership and operational teams. Our services are designed to address the specific pressures faced by mid-tier accountancy firms navigating rapid expansion in 2025.

Professional indemnity (PI) insurance: PI insurance safeguards firms against advisory errors in complex areas like ESG reporting, tech advisory, or transactional support. Compliant with ICAEW minimum terms, our policies exclude only forensic cyber investigation costs, offering robust coverage. With over 90 specialists nationwide, Marsh delivers enhanced protection to support confident growth across service lines.

Directors and officers (D&O) insurance: D&O insurance protects leadership teams from governance risks, including investor scrutiny or litigation from strategic decisions. Tailored for high-growth environments, it ensures directors and officers can navigate PE-driven pressures or aggressive expansion with confidence.

Transaction risk insurance: Our warranties and indemnities (W&I) and tax liability insurance mitigate M&A-related risks, such as due diligence gaps or post-transaction claims, enabling firms to pursue acquisitions securely.

Marsh’s Risk Consulting team: Marsh is not just about insurance, but dealing with risk holistically. We can help you do more by knowing more. For firms wanting to enhance their risk management strategy or secure new accreditations (for example, ISO), Marsh’s Risk Consulting team can provide project support to create capability and capacity to embed change, while your best and brightest focus on delivering value for your clients. 

Act now

The ICAEW 2025 report signals a mid-tier accountancy sector with unprecedented growth potential. Yet rising risks — skills shortages, regulatory complexity, PE oversight, and technology adoption — demand proactive management. Firms that fail to address these challenges may face service disruptions, client attrition, and reputational harm.

Marsh FINPRO offers a comprehensive approach to risk protection and strategic growth. Our solutions help align strategy with 2025 trends, secure competitive advantage, and strengthen your role in supporting SMEs and driving UK economic growth.

Marsh works with the UK’s top accountancy firms, managing insurance for over 4,000 accountancy clients. Our team includes experienced claims advocates specialising in financial and professional lines claims, providing advisory support to firms of various sizes.

Marsh FINPRO National team

We advise mid-tier accounting firms to mitigate key risks associated with growth

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Our people

Michael Newton

Client Executive Leader, FINPRO

  • United Kingdom

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