M&A activity in IFA sector remains constant: Imas

Fred Hansson, a partner with the research firm, said: “There is a fairly constant stream at the lower end of the scale, which is probably the result of ongoing consolidation from an extremely fragmented market, and the potential is for that to continue for a long time.

“It is striking that in most other sub-sectors it is fairly quiet, but in the IFA sector deals continue to be done, and there is reason to believe it will continue.”

He said what will drive further mergers and acquisitions would be whether there are still sellers able to realise what they think is fair value for their business. “If they can continue to do that then I am sure it can continue for the next 12 to 18 months”, he added.

Mr Hansson said there had consistently been around 45 deals per quarter being done over the past five quarters.

Chris Hannant, director general of Apfa, said: “I am not surprised to hear there are more deals in the financial advice sector, because it is a fragmented market and we know there are people out there who want to buy up.

“But if you look at the number of firms, both DA and AR, they have been remarkably stable despite the amount of M&A activity.

“I would take that as a sign that as fast as firms are being hoovered up, new ones are being created.”

This week Bellpenny bought two IFA firms – Caledonia Edinburgh and Rawson Steele – taking its funds under management above £3bn.

Meanwhile Tavistock Investments has bought Duchy Independent Financial Advisers as part of a £500,000 deal, and Attivo has bought mortgage broker Porter De Vere.

Adviser view

Tim Mears, managing director of Cornwall-based Duchy Independent Financial Advisers, said: “I’ve been looking to find the right partner for some time and have had discussions with several parties.

“Tavistock impressed me as the best option, not just for me, but also to secure the potential for an eventual retirement exit for our advisers.”