The stage is set for the next wave of financial advice and wealth management firm acquisitions.
But what will the new owners look like, and what will they want from advice businesses?
Back in 2019–20, the UK advice market saw a flurry of mergers and acquisitions, driven largely by private equity money.
Five years later, roughly around the time PE firms typically seek an exit, the cycle is turning again.
Louise Jeffreys, managing director at Gunner & Co, recalls that during the Covid years, her firm received a surge of calls from PE houses eager to enter the sector.
“That’s when [financial planners] IWP and Amber River (then Socium Group) set up, and also groups like Radiant, One Four Nine Group, Finitor Wealth (now Purposeful Group) and MKC Wealth,” she says. “They were PE-backed and launched as buyers mostly.”
Some of those businesses have already evolved.
“Perspective has been around for a long time and has grown both organically and through acquisition,” Jeffreys explains.
“Some others, like Shackleton [formerly Skerritts], have transitioned, while One Four Nine Group is reportedly still actively looking in the market.”
Deal momentum returns
What the market is seeing now is largely a changing of the guard; new investors replacing earlier ones as activity gathers pace again.
Callum Pirie, a director in Houlihan Lokey’s FinTech Group, says: “We probably went through a relatively quiet spell in 2023 and early 2024 while a lot of people were integrating their businesses, and debt capacity wasn’t super high, but that slowdown has gone away now.”
He adds that many PE-backed firms that invested four or five years ago are now reaching the end of their holding periods.
“There’s a lot more activity, both right now and coming in the next 12 months . . . Everyone’s starting to think about transactions again.”
That trend seemingly includes Evelyn Partners, whose current PE owners — Permira and Warburg Pincus — are reportedly looking to sell, according to sister title, the Financial Times, fitting a wider pattern of private equity houses seeking exits after a full investment cycle.
Evelyn Partners declined to comment on the reports of a potential sale.
Still room for private equity
Across the market, there are still a number of PE-backed firms actively pursuing buy-and-build strategies, says Giles Dunning, partner at Stephens Scown. “As the wealth management market is still seen as fragmented, with a large number of small independent firms still in existence, consolidation is as active as ever with much of this activity driven by PE.”
Jeffreys agrees that while PE interest is far from over, the profile of those investors are shifting.
Early-stage backers tend to move on once the firms they have backed outgrow their scale. Then, larger houses step in.
“If you’re a PE house looking at this sector, there’s still a lot of room to make money,” she says.
The focus is also shifting, according to Brian Hill, M&A adviser at Pathfinders.
He says newer investors are becoming more selective and risk-aware, prioritising “culture before cash” to reduce client and staff attrition post-acquisition.
“They’re focusing on recurring, defensible revenue and cultural alignment,” he says. “Many PE firms already have hub-and-spoke models and only seek acquisitions that fit this structure. Sellers with poor preparation or toxic legacies are less attractive, causing a clear market split in valuations.”
From multiples to culture
In the early waves of consolidation, many PE buyers focused on paying the right multiple and scaling fast.
“There’s been a greater focus on integration over the past 24 months, partly due to consumer duty,” says Jeffreys.
“A PE-backed firm that’s properly integrated, with one back-office system, one charging structure, and one brand is far more valuable to the next PE owner [than a fragmented group].”
She points to Verso Wealth Management as an example: “They launched around 2020–21, bought several businesses, then paused for 12 months to integrate them . . . through their ‘One Verso’ project.”
They are now back in acquisition mode, but only buying firms that can fit seamlessly into their model, Jeffreys says.
Adviser retention and culture are now viewed as strategic imperatives.
Buyers are increasingly aware that keeping advisers happy is crucial, not just to protect assets, but for long-term growth.
Jeffreys says: “[There’s a growing shift towards] putting staff at the centre of the business, with the logic that if you get the staff right, the clients will naturally follow.”
Bigger firms, bigger backers
As advice businesses scale up, so too do the investors.
For example, larger PE firms such as Charlesbank and Sovereign Capital Partners are investing in advice.
As a result, Jeffreys notes that smaller houses need to be more nimble and may form partnerships to stay active; “but I don’t think UK wealth firms will outgrow private equity interest altogether”.
In the US, she adds, the scale of deals is on another level: “Even smaller US wealth managers have $600mn to $1bn under management, and buyers can be 10 times that size. Many are backed by US pension funds.
“Those same US players are becoming increasingly interested in the UK market [and their weight could support larger future deals].”
Will banks join the party?
According to Pathfinders’ Hill, large financial institutions, including banks and insurers, could also return to the M&A table.
In the case of Evelyn Partners, both NatWest and Royal Bank of Canada have been touted as potential suitors.
Permira has owned Evelyn Partners since 2014, but Warburg Pincus became a minority investor in 2020.
Banks in the UK have robust balance sheets and are strongly capitalised, with reserves to do deals of a significant size.
Hill adds: “A business the size of Evelyn would be a strategic fit for a large bank or insurer looking to integrate clients into broader financial services.
“Larger financial institutions remain cautious but could re-enter the wealth market if clean acquisition targets appear. The market is awaiting clearer signals on whether big banks or insurers will actively pursue deals in 2025–26.”
On advice firms attracting new types of buyers, Houlihan Lokey’s Pirie explains that banks are seeking to diversify away from interest income: “Interest income will always be their biggest profit driver, but businesses generating non-interest income . . . make banks less cyclical.
“Many banks already have wealth management operations, but they’re often built around large client banks where the proposition doesn’t quite match the quality they’d like to offer.”
To make a meaningful difference and move the dial for their business, they need to buy something big, and there are only a handful of UK firms of that scale, Pirie adds.
Strategic alignment — or not?
Jeffreys is, however, more sceptical about whether major banks will find the right cultural fit.
“After Aviva bought Succession, many expected more large financial institutions to invest in wealth management, [but that didn’t materialise],” she says.
“There’s still plenty of opportunity for private equity because the consolidation market remains huge, with thousands of small independent firms led by ageing principals.
“There’s talk of banks wanting to return to wealth management, but even the largest UK advice firms are tiny compared to banks. A retail bank might have average client [balances in the hundreds or low thousands], whereas a successful wealth manager manages £200,000 per client or more.”
For Jeffreys, Aviva’s move made sense because it aligned with its broader wealth and retirement strategy.
Evelyn Partners: a bellwether deal
Evelyn’s potential sale will be closely watched as a benchmark for valuations.
The firm has simplified its proposition in the past year, selling its professional services arm (the former Smith & Williamson accountancy business) to Apax, and its fund solutions division to Thesis.
Hill says its reported £2.5bn valuation at around a 14-times Ebitda (multiple) represents “a respectable return” for its PE owners.
However, he notes that while Evelyn is now a pure-play wealth manager, its sell-offs have reduced diversification.
“If fee pressure or net flows stall, there’s limited non-correlated revenue to soften the blow,” he warns.
Its full-year results for 2024 illustrate that point.
Net new inflows fell sharply; £1.3bn in 2024 versus £3.1bn in 2023, a near 60 per cent drop, although adjusted Ebitda rose to £174.3mn (a margin of 35 per cent), helped by cost control and interest income.
Hill observes: “Gross new business inflows were stable, at £8bn versus £7.8bn, so the issue isn’t attracting new money but higher outflows. Net new money growth fell from 5.8 per cent to 2.2 per cent, signalling weaker organic growth.”
In its 2024 annual report, Evelyn Partners said: “Across the wider UK wealth management sector, outflows were elevated, particularly at the start of the year, reflecting the pressures faced by clients from high interest rates and inflation.”
Assets under management still rose in 2024, to £63bn from £59.1bn, mainly thanks to market performance.
“The multiple is healthy compared to smaller firms typically valued at 10 to 12-times,” says Hill. “It suggests shareholders see Evelyn as a moderately successful investment over 10 years. The current profitability and valuation support future growth, but the falling inflows point to a need for strategic adjustment.”
In its H1 2025 results, net new money growth is up compared with the same period in 2024, while the company expects the Ebitda margin to continue improving as a result of efficiencies from simplifying the group, improvements in technology, and investment in systems.
What M&A wave means for advice firms
If the next wave of M&A is indeed underway, the implications for financial advisers are clear.
- Integration and culture matter: PE buyers are prioritising firms that fit cleanly into existing models, with aligned values and unified systems.
- Preparation pays off: Businesses with clear succession plans, stable recurring income and tidy client books will command higher valuations.
- Scale still sells: Larger, integrated groups attract the bigger PE houses, and potentially strategic buyers too.
The players may change, but the story is not over. It is just entering a new chapter.
Ima Jackson-Obot is deputy features editor of FT Adviser