M&A activity to step-up in IFA sector as industry continues to consolidate

by | Nov 1, 2016

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Most advisers believe that M&A activity amongst small firms will continue to increase over the next two years.

The findings come from new research by Investec Wealth & Management which shows that of the IFAs questioned, 55% thought that M&A would increase as regards small firms, but also that 37% believe there will also be a rise in M&A amongst larger firms as the industry continues to consolidate.

The main driver for M&A activity, believe 42% of IFAs, is owners looking to sell their businesses in order to retire, or semi-retire.


Other key findings include that 30% of advisers plan to sell their business entirely on retirement; 34% say technology is playing a role in the growth of M&As by creating more efficient business models; and, 33% also attribute the growth of M&A’s to the evolving regulatory landscape.

The study also revealed that advisers believe the biggest factor influencing their decision on which firm they would sell to is ensuring they would maintain a high level of client service. The second most important factor was securing the best financial return and the possibility of remaining involved in their firm on a semi-retired basis.

Head of Intermediary Services, Investec Wealth & Investment Mark Stevens said: “M&A in the IFA sector will continue apace over the next few years as advisers belonging to the baby boomer generation will be looking to hang up their boots.  When you add the impact of new and more complex regulation and better technology you have an ideal environment for consolidation.


“In our experience M&A activity inevitably leads businesses to conduct a thorough review of their business operations and this often results in a decision to outsource the investment management process to a reputable specialist with the expertise and scale required to provide a high quality service to an expanded client book.”

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