The wealth management and financial advisory sector is undergoing profound transformation, driven by an escalating wave of regulation, and compliance requirements. At Coleman Wealth was are seeing firms use this as an opportunity to scale up, enhance resilience and adapt to a more complex environment — with research suggesting almost half of UK financial advisers were approached by consolidators in the last year.
In the UK, the Financial Conduct Authority’s Consumer Duty introduced additional requirements around client outcomes, transparency, and service standards. Meeting these can require substantial investment in technology, staff training, and operational processes – challenges that many firms struggle to overcome. Recent reports show that 13 per cent more advisers in the UK now find compliance significantly more challenging compared to the previous year.
In the pensions sector, the FCA’s latest proposal to provide targeted support may be difficult for financial advisories to implement, with advisers expected to equip consumers with education, while compliance in the sector is also intensifying regarding ESG.
Meanwhile regulations, such as the FCA’s anti-greenwashing rule, introduced in May this year, have required firms to implement robust frameworks for disclosure and transparency. These demands, while essential
for fostering investor trust, add yet another layer of operational complexity. For smaller firms lacking the infrastructure or expertise to navigate these changes, consolidation offers a viable solution, enabling access to advanced compliance tools and experienced teams to navigate the evolving regulatory environment on these issues.
For smaller advisory firms, the benefits of merging with larger players extend far beyond meeting regulatory demands. Such partnerships provide access to broader client bases, greater financial stability, and advanced operational capabilities. These enable smaller firms to invest in innovative technologies, streamline operations, and attract top talent — all of which improve client retention and expand market reach.
This trend is not confined to smaller firms. Larger entities are increasingly acquiring smaller consolidators, driving a “consolidation of consolidators.” This evolution has resulted in fewer, more dominant market players with the scale to diversify services, invest in cutting-edge tools, and address complex client demands. The scale of this shift is evident in the wealth management sector’s growing deal size. In the first three quarters of 2024, total transacted AUM reached $541.5 billion, a 168 per cent increase from the same period in 2023, reflecting the rise of larger high-value transactions and the consolidation of market leaders.
By pooling resources, firms can address rising regulatory demands, meet client expectations, and leverage technology to improve service delivery. Larger consolidators also benefit from such strategic acquisitions, allowing them to increase their scale of operations and enhance client outcomes. Consolidation has created a dynamic sector with fewer but more capable players, better equipped to thrive in an increasingly complex environment.
The trend toward consolidation is further fuelled by a highly competitive market environment. Firms seeking to sell find themselves with multiple potential buyers, facilitating the process of finding suitable partners. This heightened demand is reflected globally; according to a recent PwC survey, 81 per cent of wealth and asset managers worldwide are considering consolidation to innovate, expand into new markets, and diversify their product offerings.
For consolidators with international ambitions, such as Coleman Wealth — operating across the UK,Switzerland, Malta, Dubai, Singapore, and Malaysia — this landscape offers significant opportunities. The availability of diverse acquisition targets enables these firms to expand strategically, strengthening their market presence and service portfolios across multiple regions.
By acting decisively, firms can strengthen their position in this competitive landscape, leveraging scale and partnerships to secure long-term success amidst increasing complexity and demand.
