The pace of acquisition in the advice space fell marginally in 2024, with 127 publicly announced deals compared with 134 in 2023, research by NextWealth has revealed.
However, the consultancy found the value of deals was significantly higher due to the acquisition of several firms with more than £1bn in assets under administration by acquirers such as Titan Wealth.
In its third annual ‘consolidators and aggregators’ report, published today (3 April), NextWealth said merger and acquisition activity continues to “re-shape” the UK financial advice market.
It found the cost of acquiring firms has doubled since 2021, increasing from 3-6x Ebitda in 2021 to 6-12x in 2024. And this upward trend is “likely to continue”.
More than 30 private equity firms are invested into financial firms, and NextWealth predicted private equity interest in financial services will continue.
Overall, 2024 was a strong year for acquisitions, especially in the second half.
“We are already seeing comparable numbers in the first quarter of 2025 compared with previous years,” the firm said, in its report. “We hear of a significant pipeline of new acquisitions for Q2 and Q3.”
However, it added, the Financial Conduct Authority reviews of consolidation and ongoing advice will “potentially slow volumes”.
This year’s report included profiles of 25 acquirers that have made significant acquisitions over the past four years.
NextWealth analysed whether firms have in-house capabilities across functions including platform, fund management, portfolio management, technology and professional services.
Across the profiles, it found 84% of firms had in-house model portfolio services and 68% had an in-house range of funds.
Several stated their current focus is on upgrading their centralised investment proposition (CIP) and that they are open to working with investment partners to develop in-house fund and portfolio ranges.
NextWealth managing director Heather Hopkins said that, over the next 12 months, she expects the 2024 trend to continue with a slowing in number of deals but the value of deals growing.
“A growing number of PE firms will look to exit positions and we’ll see the rise of consolidation of consolidators,” she said.
“In our interviews with consolidators we consistently heard that firms have a healthy pipeline of acquisition targets, and we expect this trend will continue to re-shape the UK wealth market.”
