UK IFA sector sees M&A activity hit record high in 2025

Merger and acquisition (M&A) activity in the independent financial adviser (IFA) sector has increased “significantly” over the past five years to reach a record high number of deals in 2025, a report from Heligan Corporate Finance has shown.

It found that the number of M&A transactions in the UK IFA space rose from around 50 deals in 2020 to over 115 in 2022, and reaching a record high of 133 deals in 2025.

Over the five years, the sector has experienced sustained consolidation activity, as larger platforms and wealth management groups continued to acquire smaller advisory firms, the report noted.

It added that well-capitalised buyers, especially private equity-backed consolidators and vertically integrated wealth advisers, had played an increasingly significant role in driving M&A activity and building national advice platforms.

The UK IFA market remained highly fragmented, with thousands of owner-managed practices across the country, which made it well suited to buy-and-build acquisition strategies, Heligan Corporate Finance stated.

The report identified several structural trends underpinning increased consolidation, with many independent advisers approaching retirement and looking for succession solutions, while growing regulatory, compliance, and technology costs had made it more difficult for smaller firms to operate independently.

“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,” commented Heligan Corporate Finance partner, Greg Easter.

“In 2020, private equity-backed buyers accounted for around 42 per cent of transactions, but by 2025 this had risen to 75 per cent of deals.

“This trend highlights the increasing role of institutional capital in driving consolidation across the UK wealth sector.

“Private equity-backed platforms benefit from access to significant capital and pursue buy-and-build strategies, acquiring multiple advisory firms to rapidly scale assets under management and distribution capabilities.

“Capital continues to flow into scaled platforms, particularly from US investors, which is accelerating the shift towards larger, integrated wealth businesses.”

M&A activity remained focused on smaller firms, with IFA businesses with under £200m in assets under management accounting for 67 per cent of the deals completed in 2025.

The acquisition of IFA and financial planning firms was now “overwhelmingly” driven by IFA consolidators, rising from around 27 per cent of buyers in 2020-2022 to 55 per cent in 2023-25, while vertically integrated advisory firms were increasingly acquiring investment management businesses and technology platforms.

“Looking ahead, regulatory change and strong private equity-led investor demand has driven rapid consolidation and rising valuations in the UK advice market, and we expect to see overall prices remain high for some time,” Easter noted.

“While capital continues to flow into scaled platforms, current valuation levels may reflect elements of a valuation bubble, which could correct as the market develops, and greater emphasis is placed on delivering organic growth.

“Currently, buyers, particularly large consolidators, tend to offer broadly standardised valuations with limited flexibility.

“As the market matures and buyers focus more closely on efficiency and integration, this may shift towards a more differentiated pricing environment, with premiums paid for high-quality businesses and discounts applied to less attractive opportunities.

“Overall, those 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.”

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