Consolidation deals in the UK IFA sector climbed almost a third in five years, rising from 50 deals in 2020 to more than 115 in 2022 and peaking at 133 in 2025.
M&A activity increased as larger platforms and wealth management groups acquired smaller advisory firms, according to the latest Heligan Corporate Finance UK IFA M&A Update report.
Meanwhile, the trend has accelerated as more independent advisers face retirement or struggle with rising red tape.
Well-capitalised buyers, particularly private equity-backed consolidators and vertically integrated wealth advisers, have played an increasingly significant role in driving transaction activity and building national advice platforms., according to the report.
In 2020, PE-backed buyers accounted for only around two-fifths, 42%, of transactions, but by 2025 that had risen to three-quarters, 75%.
The report said that deal activity has remained heavily focused on smaller firms, with IFA businesses managing less than £200m in assets accounting for more than two-thirds, 67%, of deals done in 2025.
The market remains highly fragmented, with thousands of owner-managed practices across the UK, making it well suited to buy-and-build acquisition strategies, according to Heligan.
The firm said there are several structural factors that underpin the trend towards consolidation, with many independent advisers approaching retirement age and seeking succession solutions, while rising regulatory, compliance and technology costs have made it more challenging for smaller firms to operate independently.
Greg Easter, partner at Heligan Corporate Finance, said: “Private equity investment and regulatory change have driven consolidation in recent years, and the market shows little signs of slowing as US investors continue deploying capital into larger wealth platforms.”
He said US-backed firms are estimated to represent approximately £222bn of assets under management, compared with around £165bn for UK-backed platforms. “We expect to see this dynamic further accelerate consolidation across the IFA sector, leading to a greater share of ownership shifting towards international investors over time.”
The buyer landscape has also changed considerably over the last five years, with acquisition of IFA and financial planning firms now overwhelmingly driven by IFA consolidators, increasing from around 27% of buyers in 2020-2022 to 55% in 2023-2025.
Deal activity remains concentrated in established wealth centres such as London and the South-East, the Midlands and parts of Scotland, although in the last three years there as a broader geographic dispersion of transactions across the UK, with increased activity in parts of Wales, northern England and the South-West.
Mr Easter said: “Firms that can demonstrate strong organic growth, scalability, clear earnings visibility, and those who can clearly articulate their unique value drivers – including client demographics, sector or segment focus, use of technology, and differentiated product offerings – will be best positioned to attract premium valuations.”