A boom in mergers and acquisitions (M&A) involving financial advice firms is likely to continue, according to Heligan Group.
The firm noted that M&A activity in the UK IFA sector has been ‘buoyant,’ with acquisitions involving IFAs nearly doubling from 5% of firms in February 2024 to 9% in December 2024.
This has been underpinned by regulatory pressures such as Consumer Duty requirements, increasing compliance costs, and the retirement of aging advisers. Private equity buyers coming in is another big driver of the rise in M&A activity in the sector.
The number of private equity backed firms is increasing yearly. Heligan noted several key transactions have already been completed in 2025, including Azets Wealth Management’s acquisition of Laurus Associates and Titan Wealth’s acquisition of Advisa Wealth.
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Heligan said strong competition among acquirers has kept valuation multiples at historically high levels, with firms commanding an 8-10 times earnings valuation.
Growth of national-scale advisory networks, with secondary buyouts and recapitalisations is ‘shaping the market.’
Greg Easter, partner at Heligan Group, said: “Persistent economic challenges shaped deal dynamics in 2024. Although inflationary pressures eased, elevated interest rates continued to impact financing conditions, increasing the cost of leverage and leading to greater scrutiny on transaction structures.
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“Despite these economic and regulatory challenges, M&A activity remained robust in 2024, private equity-backed consolidators continued to be key market players, focusing on firms with strong recurring revenue models, scalable operations, and solid earnings quality.
“Looking ahead, M&A momentum will persist into 2025, but with greater selectivity in pricing and deal structuring,” he continued. “The focus for IFAs now will be on how to navigate this landscape – whether that means positioning for sale, strengthening internal capabilities, or exploring strategic partnerships.
“With PE investment continuing to flow into the sector, consolidation is unlikely to slow down. Larger firms will remain aggressive in their expansion strategies, leveraging private capital to acquire and integrate smaller IFAs.”
