A LONG-ESTABLISHED business is said to have made history by becoming Scotland’s first employee-owned full service accountancy firm.

All shares of Reid & Fraser Chartered Accountants have now been placed into an employee ownership trust (EOT) marking a significant milestone within the sector which has recently seen several Scottish firms bought over by international counterparts.

Established in 1915, the accountancy firm described as a cornerstone of the Highland landscape with offices in both Thurso and Wick, and the move to employee ownership will allow the practice to continue its focus on delivering services to its pool of local clients.

With guidance from employee ownership specialists, Lindsays Solicitors and Ownership Associates, Reid & Fraser said it has been able to navigate the transition to the succession model – under the sector regulator ICAS – which will see all 17 of the business’s employees own a stake in the company through the EOT.

Stuart Walker, Director at Reid & Fraser Chartered Accountants, believes the move towards employee ownership secures the future of the firm.

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Mr Walker said: “We have loyal employees who have developed relationships with our clients, so adopting employee ownership felt like the obvious route to take. It was an easy decision.

“This move will hopefully give both our senior and our junior accountants, and perhaps those looking to make the move to Reid & Fraser, a clear path of progression to director level and a sense of stability that may not be present at other firms.”

Mr Waker, who has spent 25 years with the firm, said he has seen other companies being bought over and relocated, leaving local professionals with few options, and believed it was important to maintain the accountancy’s independence.

He added: “To think of selling or merging the practice didn’t sit right with me because there would always be that uncertainty surrounding the future for our staff and clients should there be a merger or relocation. However, with employee ownership it shifts the control and emphasis of the business to those which matter most, the staff.”

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Mr Walker looked to the professional accountancy body ICAS for advice on a succession plan as the 50-year-old began to plan his future exit strategy. Through discussion with ICAS he found employee ownership to be the most viable succession route. Long-serving employees Steven MacGregor and Linda Cameron will join Mr Walker in an enhanced management team.

Jeremy Clarke, assistant director, practice, at ICAS, said: “Stuart contacted me in early February about his options and it was clear from the outset that employee ownership was the right route to go down.”

Mr Walker then called on the help of experienced advisers to ensure that this historical transition would go smoothly.

Douglas Roberts, a partner at Lindsays who advised on numerous employee ownership transactions, said: “Reid & Fraser is a trailblazer, setting the path for other firms of accountants to follow. They are possibly the first full service firm of chartered accountants in the UK to move to employee ownership so we are sure that others in the sector will be watching with interest to see the benefits it brings, which are many.

“By opting for a sale to an EOT, Stuart has secured the practice in its local community, employment is protected and the firm’s loyal clients will see no interruption to service.

”As Reid & Fraser is a chartered accountancy practice, we had to seek approval from ICAS for the proposed structure, although that did not cause any delays. Overall it was a smooth transaction that has delivered positive outcomes for the sellers, the staff and the clients of Reid & Fraser. It was a privilege to provide advice in this memorable deal.”

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Carole Leslie of Ownership Associates, who has supported the transition of more than 70 companies to employee ownership, provided expert advice on the structure and on the engagement with employees.

She said: “This is a landmark moment for employee ownership in Scotland. Stuart Walker has demonstrated great vision in transferring Reid & Fraser to his employees. We are seeing unprecedented interest in the model at the moment, precisely because business owners like Stuart want what’s best for the employees and customers, as well as define their own exit route.”

Reid & Fraser offer services in accounts, taxation and business advisory and support services to a wide range of businesses and individuals.

The employee ownership trust was introduced in the Finance Act 2014 to encourage companies to consider a sale to employees as a feasible succession solution.

Ownership Associates works exclusively within the employee-owned sector, supporting companies on their move to employee ownership and working with established employee owned businesses enabling them to maximise the ownership advantage. There are now around 120 employee-owned companies operating, with approximately 7,500 employee-owners generating a combined turnover of around £950 million.