Phillip Whitman, President & CEO, Whitman Transition Advisors
Phillip Whitman, president and CEO of Whitman Transition Advisors, spoke with Invest: about adapting to the rapidly changing public accounting industry. “We are at a pivotal time in the profession of public accounting. There has been more change in the past three years than in the prior 130 years. We restructured and reengineered the way we look at the value of a CPA firm due to private equity investment.”
Over the past year, what have been the most significant internal and external changes that have shaped how Whitman Transition Advisors (WTA) operates?
Whitman Transitions Advisors was founded in November 2008. I became interested in the people side of the business, as well as in getting involved in mergers and acquisitions. It’s like a puzzle with many different opportunities. I like to provide a matching service with many different cultural perspectives. We are the single largest advisory firm for CPA firms in the nation. We have many resources abroad, with people in the Philippines and India.
In 2014, I hired a coach to help me with strategy and structure and found a more efficient and leveraged model. That coach is now my partner, and in 2022, we merged with our largest competitor and became the largest advisory firm in terms of headcount. When we look at our KPIs, we look at where we are today compared to where we were yesterday, not looking at other firms. In the past year, our revenues have tripled because private equity began investing in CPA firms. One of our first transactions in the private equity space was with EisnerAmper, when we merged them with a $6 million firm. It was structured differently because it wasn’t a traditional CPA firm deal. It was a CPA firm doing a transaction with the backing of private equity. We were looking at earnings before interest, taxes, and amortization (EBITA), which we had never looked at before. We always just looked at gross revenue. We restructured and reengineered how we look at the value of a CPA firm due to private equity investment. With private equity, if a firm has $600,000 of profits, they have to decide how much of that to give up as leave-behind EBITA for the private equity group.
In 2023, we did 30 M&A transactions, six of which were with strategic investors such as private equity, wealth management groups, and family offices. Everybody seemed enamored by the pipeline potential from CPA firms. In 2024, that turned around completely. We only did six CPA firm to CPA firm transactions and did 29 transactions with strategic investors. In 2025, there were three traditional transactions and 16 transactions with private equity. We have a pipeline of another 14 or 15 that should close before the end of the year.
At WTA, two of us were named in the Top 100 most influential people in accounting by Accounting Today. The past year has been tremendously gratifying, putting together pieces of the puzzle.
The accounting industry is facing a generational talent shortage. How do you view the long-term implications for succession and firm continuity?
The single largest challenge CPA firms face is talent and a lack of talent in the pipeline as enrollment in colleges and universities in accounting programs declines. The profession shot itself in the foot by making it so difficult to get a CPA. They made a fifth year requirement in education to get a CPA, which costs much more for students. The challenge of the last 20 years has been the disproportionate share of CPA firms that are baby boomer-owned compared to the number of baby boomers in the country. Seventy-five percent of the owners of CPA firms are baby boomers. I believe this is a solvable challenge. Many smaller firms recently saw that larger firms are coming to the market and can compete with them by offering lower prices. Larger firms are offshoring their talent to many other countries, increasing the number of service sectors. The single largest provider of offshore services in the tax arena is India. We have a partnership with a company in the Philippines, with 155 CPAs working with clients in the United States. Two of our clients loved the culture we built and proposed buying the company in the Philippines. Instead, we built a representative office for those two firms in the Philippines, and the people are now on their payroll and taking advantage of lower payroll costs. Other firms may not be interested in offshoring. We invested in a company called Tax Titans, an online marketplace where people can have tax returns prepared by CPAs here in the United States. They are a veteran-owned company. They train military spouses to prepare tax returns no matter where they live. The Trump Administration also just put a $100,000 fee on H-1B visas. This will impact industries in a way that it wasn’t meant to.
I believe there is a lot of talent out there, but the talent themselves don’t realize there may be a better opportunity for them at another organization. I call them passive candidates. The only way to get someone happy or complacent where they are is to clearly show them there are better opportunities. We have a recruitment team and do permanent placement, fractional recruiters, and offshore companies. We also have an offshore consulting company that we bring to CPA firms that have never done offshoring. The talent shortage will be solved by companies being open-minded and willing to select the right offshore and onshore partners. They have to engage recruiters who can convince complacent talent that there are better opportunities.
Technology will also play a crucial role. We are already seeing an impact from AI in public accounting. Without human intervention on the CPA firm side, a client will be able to have their individual 1040 tax return prepared with AI technology.
How is technology, particularly AI and automation, reshaping the way firms deliver services and maintain client trust?
WTA is using AI every day. We have a chief digital officer who teaches all of our consultants how to utilize AI. We use ChatGPT, Copilot, Gemini, and others. This young data scientist on our team taught me about Perplexity, an AI company I have invested in. Apple acquired Perplexity to utilize the AI for its iPhones and iPads. We use AI for things such as putting together business plans, due diligence on transactions, writing proposals, creating more efficient tasks, and building marketing campaigns. AI helps our recruiting team search for candidates.
We are going to see enrollment in colleges and universities decrease as a result of AI because people with four-year degrees will be unable to find jobs due to more jobs being completed using AI. The problem is that robotics and AI lack empathy, sympathy, and emotion. AI is only facts.
Looking ahead, what role do you see WTA playing in helping firms adapt to demographic changes, digital transformation, and ongoing consolidation?
We are at a pivotal time in the profession of public accounting. There has been more change in the past three years than in the prior 130 years. With the demographic shifts and different lifestyles and desires compared to baby boomers, there’s a lot of intellectual knowledge and talent that may disappear. Private equity investment is helping save the day. We have young people coming out of the finance arena to work in different industries, and they are thinking differently. There is a lot of repetitiveness in the industry, and the investments from private equity are showing that there is a better, faster, more efficient way to get things done. The opportunities for young people are better than those for older people who are monetizing private equity coming in. It used to be that you would merge, work 10 years, and get paid a retirement benefit. Now, you do a transaction, and there is significant money up front. For some firms, we are going to see an exit to the public markets. Private equity groups love this business, and they are going to stay in this space for at least the next 10 years.
