M&A activity amongst small IFA firms is set to rise, according to 55% of advisers who were surveyed.

Over a third (37%) forecasted this would also increase among larger firms, the Investec Wealth & Investment study found.

Some 42% of respondents believed a main driver towards this was owners looking to sell their businesses in order to retire or semi-retire.

Nearly a third (30%) of advisers said they plan to sell their business entirely on retirement.

According to advisers, the second and third key factors behind the rise in M&A are the role of technology in creating more efficient business models (34%) and the evolving regulatory landscape (33%) respectively.

Mark Stevens, head of intermediary services, Investec Wealth & Investment, 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.”