Third NextWealth report shows that consolidation and aggregation trends in M&A are still ongoing

A recent study on consolidators and aggregators reveals that merger and acquisition activities are continuously reshaping the financial advice landscape in the UK.

The 3rd annual Consolidators and Aggregators Report by NextWealth focuses on analyzing deals that occurred between Q1 2021 and Q1 2025. This report offers insights into the financial advice business acquisition market, its implications for providers, and key drivers and trends.

Despite a slight decrease in the pace of acquisitions in 2024, with 127 deals publicly announced compared to 134 in 2023, the report highlights a significant increase in the value of these deals. This is primarily attributed to the acquisition of several firms with assets under advisement (AUA) exceeding £1 billion by acquirers like Titan Wealth.

Furthermore, the study underscores that the cost of acquiring firms has doubled since 2021, rising from 3-6 times earnings before interest, taxes, depreciation, and amortization (EBIDTA) in 2021 to 6-12 times in 2024, a trend that is forecasted to persist.

The report also sheds light on the fact that more than 30 private equity firms are invested in financial institutions, signaling ongoing private equity interest in financial services in the foreseeable future.

Heather Hopkins, Managing Director of NextWealth, anticipates that the trend observed in 2024 will continue over the next year, with a slowdown in the number of deals, but an increase in deal value. She foresees a surge in the consolidation of consolidators, driven by a growing number of private equity firms looking to exit their positions. As per interviews with consolidators, companies are actively seeking acquisition targets, indicating a continued transformation of the UK wealth market.

This year’s report includes profiles of 25 acquirers who have made significant acquisitions in the past four years. NextWealth’s analysis of these firms reveals that 84% have in-house model portfolio services, and 68% possess an in-house range of funds. Many acquirers are currently concentrating on enhancing their centralised investment proposition (CIP) and are open to collaborating with investment partners to develop in-house fund and portfolio ranges.

Heather Hopkins notes that acquirers are increasingly adopting vertical integration, providing a range of services to simplify operations and increase profit margins. By refining their investment propositions, acquirers aim to create a competitive and appealing offering for acquired advisers and their clients. This shift towards vertical integration is expected to influence the industry substantially, compelling platforms, asset managers, and discretionary fund managers to adapt and innovate accordingly.