However, while the number of firms looking to buy an adviser firm has increased, up from 37% last year, fewer (35%) are interested in selling (within the next five years) and 30% have no plans to sell their business.

Of those looking to sell, a deal with another advisory firm is the preferred route for nearly half of responders.

Nucleus says the ‘lure’ of a large consolidator looks less appealing, dropping to only 4% from 13% last year, with acquisition by a product provider looking similarly unattractive, with only 1% considering this route.  

There has been a rise in those business owners with a succession plan in place, up to 42% from only 25% last year. However, sover half of owners do not have a plan, the survey found.

Despite the slight increase in the age of responders, retirement is a long way off for many business owners, with only 10% seeing this as an immediate concern or challenge.

Nucleus surveys its 400 users every year for its ‘census.’

Barry Neilson, chief customer officer at Nucleus, said: “Succession planning and M&A activity is something every advice firm needs to consider. Having a plan in place is vitally important, even if it is 10 or 20 years off, as unexpected decisions can come thick and fast and put a big strain on capacity if not prepared for.

“The challenge of succession is to ensure a smooth transition for staff and clients, minimising disruption and risk, all the while addressing the entirely reasonable financial interests of the founder – something that can be a tricky balancing act.

“It is clear advisers have, therefore, been put off by some of the stories of acquisitions by large consolidators. Many are discovering that a sale to a like-minded firm is the most likely way to ensure a consistent experience for clients.

“Some advisers may fear that the years of trust and loyalty built with these clients could be eroded quickly by a sale to a large consolidator.”