As the average age of financial advisers in the UK continues to rise—and younger professionals are not entering the industry at the same rate—consolidation has become an increasingly appealing option, particularly for those looking to retire or exit the business.
This blog doesn’t aim to pass judgment on whether selling to a consolidator is inherently good or bad. Instead, it encourages financial planners, clients, and industry observers to challenge their assumptions and consider both the opportunities and the risks that consolidation brings.
The Positive Side of Consolidation
Consolidation has clear benefits when it’s done thoughtfully and with long-term client outcomes in mind. Many larger firms—and an increasing number of medium-sized, values-driven practices—are acquiring smaller firms to support succession planning and ensure continuity of service.
In these scenarios, acquiring firms often bring existing staff and advisers on board, maintaining trusted relationships and embedding the client-first culture. This approach can protect clients, preserve values, and create operational efficiency while improving long-term outcomes.
The Rise of Venture Capital-Backed Consolidators
However, not all consolidations are created equal. An increasing number of consolidators are backed by private equity or venture capital, where the primary motive is often short-term financial return rather than long-term client value.
A recent article in New Model Adviser raised red flags about the aggressive growth in M&A activity within the financial advice sector. When venture capital is involved, the incentives often shift from client care to maximising profitability. The formula is simple: acquire businesses, cut costs, and retain as many clients as possible to increase the valuation for a future exit.
This model may work on paper, but it’s a high-risk strategy that commoditises clients—reducing them to nothing more than assets on a balance sheet.
Is This Sustainable?
There are growing concerns about whether this rapid pace of acquisition is sustainable. Overinflated prices, cost-cutting measures, and short-termism could create a fragile ecosystem that may eventually falter under its weight.
At some point, early consolidators will need to sell on to the next buyer in the chain, leading to further upheaval and, potentially, poorer outcomes for clients. If clients experience declining service quality or feel like they’re just a number, retention rates may drop—and the entire model could come under pressure.
The Clients Are What Matter Most
While the debate over consolidation will continue, it’s crucial not to lose sight of the clients who matter most. When an advice firm is absorbed by a consolidator that lacks genuine interest in client wellbeing, those clients can quickly become a means to an end—used to inflate valuations and line the pockets of a few stakeholders.
This raises important ethical questions. Does consolidation serve clients? Are their long-term interests being prioritised? Or are they being swept up in a wave of corporate transactions with little regard for their financial well-being?
The Financial Conduct Authority (FCA) will likely increase its scrutiny in this area, especially as more evidence of poor client outcomes emerges. It will be telling to see how regulation and market dynamics respond in the years ahead.
Final Thoughts
Consolidation in financial advice is not inherently good or bad—it depends entirely on the acquiring firms' motivations, values, and practices. Thoughtful, client-centric consolidation can bring benefits. But when profit is the only driver, it risks turning trusted financial planning into a transactional, depersonalised service.
As an industry, we must consider carefully the long-term implications of consolidation—not just for business owners and investors but also for the people who trust us: our clients.
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