Consolidation in wealth management.
Our latest research, conducted by industry consultants FoxRed Insight and Solve Partners, offers a strategic blueprint for successful consolidation.
Money Marketing: Prudent consolidation and the rewiring of modern wealth management
As firms increase M&A activity, regulatory findings emphasize the need for clear, responsible consolidation and integration processes.
Money Marketing: Prudent consolidation and the rewiring of modern wealth management
Consolidation is reshaping UK wealth management at a pace the sector has never before experienced.
Since 2020, the number of firms authorised to provide retail advice has fallen by 11.3%, and many of the most active acquirers have completed 60–100 deals within just four to five years.
What began as a route to scale has become a structural response to rising regulatory demands, shifting adviser demographics and the increasing cost of delivering advice.
But the Financial Conduct Authority’s (FCA) latest multi-firm review signals a shift. The regulator is not challenging consolidation itself, but rather how firms consolidate.
It wants to see governance that scales with ambition, clarity of business models, credible financial resilience and integration programmes that protect clients and regulated entities. This is not simply best practice – it’s a prerequisite for sustainable growth.
Recent findings from FoxRed Insight and Solve Partners, in partnership with SEI, reinforce why that shift is necessary. Firms often underestimate the difficulty of entity rationalisation and many report lengthy delays linked to data cleansing, re-papering, probate cases, orphaned assets and the decommissioning of legacy systems.
These structural challenges mirror industry concerns around disorderly failure, inadequate oversight and operational risk.
Integration quality becomes a regulatory issue
Acquisition success is determined not by the deal but by the integration engine that follows. Research shows several firms have had to pause acquisitions because their integration capability could not keep pace, and that firms with dedicated integration resources are three times more likely to hit financial expectations (92% vs 32%) .
The FCA’s own findings amplify this. It warns that insufficient investment in governance, risk management and oversight creates poor consumer outcomes, weakens operational resilience and undermines regulatory confidence.
Senior leaders admit that boards often believe once the deal is signed it’s complete, overlooking the 18-month integration cycle, the need for defined target operating models and the critical role of early stakeholder engagement.
People risk during the consolidation process is a central concern. Data shows regretted adviser attrition should stay below 5%, yet nearly 20% of firms report levels well above this. Attrition is highest when proposition buy-in is poorly communicated, when advisers fear loss of autonomy, or when pricing alignment creates client-level tension.
These are exactly the scenarios that create the highest risk of client harm and operational disruption during periods of rapid growth.
Financial resilience, leverage and new scrutiny
A major difference between today’s consolidation cycle and earlier waves is the level of external capital and leverage embedded within groups. Research shows more than 88% of deals since 2021 have been PE-backed, bringing significant debt to finance acquisition activity.
Signs of refinancing stress are already visible: some firms reported that early acquisitions remain unintegrated, dragging on margins and restricting cash flow flexibility. Others acknowledge acquiring anything and everything during 2022’s peak and now facing subsequent operational and financial consequences.
This is where the regulator’s stance matters most. Change of Control scrutiny is tightening, poor quality submissions slow authorisation, regulatory focus on debt serviceability is intensifying and firms without internal CRO capability find processes longer and more challenging.
In an environment where prudential consolidation rules and Consumer Duty obligations intersect, this governance gap is no longer sustainable.
Consumer outcomes depend on execution, not scale
Clients naturally benefit from firms’ improved digital capability, more consistent service, more regular communication and, critically, consistent fees. Smaller clients may even receive better service when placed into dedicated small client propositions, rather than remaining at the bottom of an overloaded adviser’s book.
However, these outcomes are not guaranteed. They depend on the pace and quality of integration, the maturity of governance and the clarity of the firm’s destination operating model.
The future will reward firms that can consolidate responsibly: those with the discipline to plan, the courage to rationalise, the capability to integrate and the governance to demonstrate stability.
Regulators are redrawing the expectations. The firms that will lead the next decade of UK wealth management are those who align commercial ambition with regulatory resilience, cultural coherence and client value.
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Important information
The following information can be sourced to FoxRed and Solve Partners:
Since 2020, the number of firms authorised to provide retail advice has fallen by 11.3%, and many of the most active acquirers have completed 60–100 deals within just four to five years.
Firms with dedicated integration resources are three times more likely to hit financial expectations (92% vs 32%).
Senior leaders admit that boards often believe once the deal is signed it’s complete, overlooking the 18-month integration cycle, the need for defined target operating models, and the critical role of early stakeholder engagement.
More than 88% of deals since 2021 have been PE-backed, bringing significant debt to finance acquisition activity.
Some firms reported that early acquisitions remain unintegrated, dragging on margins and restricting cash flow flexibility. Others acknowledge acquiring anything and everything during 2022’s peak and now facing subsequent operational and financial consequences.