The pace of merger and acquisition activity in the IFA market has increased with widespread consolidation under way, according to new research from respected pollsters Opinium.

The firm’s latest IFA Barometer found M&A activity has even stepped up since December as consolidation gathers pace.

About one in 10 IFA firms (9%) have acquired other firms since December alone, the survey reveals.

At the other end of the scale, a trend for smaller firms to exit the market seems to be growing.

According to Opinium: “New data reveals a notable increase in acquisitions among Independent Financial Adviser (IFA) firms, with 9% of firms having acquired other businesses as of December 2024.

"This marks a steady rise from 5% in February 2024 and 6% in September 2024, signalling a growing trend of consolidation within the sector.

Key findings from the survey include:

• One in 10 (9%) IFA firms have acquired other firms since December 2024 
• One in 20 (6%) have merged with another firm as of 2024 
• Mergers have remained steady with 5% of firms reporting mergers with other companies since December - no significant change since September 2024. 

Opinium says the survey also highlights a “clear trend” of smaller IFA firms exiting the market. Some 17% of sole traders say that they have sold part or all of their business in the past 12 months.

The data points towards a trend for IFA firms to become more active in acquisitions while taking a more cautious approach to mergers.

Opinium says: “The evolution of these patterns could have significant implications for market competition and client service in the coming years.”

Alexa Nightingale, global head of financial services research at Opinium, said: “Smaller adviser firms are clearly leaving the market, whilst the strategic shift towards acquisitions reflects the increasing focus on growth and consolidation across the sector.

“The rising number of acquisitions is a signal of confidence among larger firms to expand their reach, while smaller firms seek exits or transitions. These trends will shape the future landscape of the IFA sector and its ability to deliver comprehensive services to clients.”