M&A focus to shift to large advisers due to cost

"If we do a really big deal, like the merger with Towry, its because it has a strategic value, if we do something a bit smaller, then it will be about taking those people into the firm.

"We tend to spend a lot of time on getting to know firms before we buy them, and on due diligence, and of course there is a cost to that, and all of that is factored in to the business case for an acquisition." 

But there were also a number of small deals with consolidators such as Succession and AFH swooping on a number of firms these past two years, some valued at more than £3m and some at less.

Mr Dyer said regulatory changes introduced in recent years, such as the Mifid rules on costs and charges, had led to an uptick in the number of firms looking to sell, while the number of consolidators in the market continued to rise, meaning the prices paid by consolidators have started to rise.

David Scott, an adviser at Andrews Gwynne Private Wealth Management in Leeds, said: "The average age of an adviser has risen, and a large number of qualified advisers have been exiting.

"I think the MIfid rules have been the game changer, the regulatory and compliance burden is enormous, both in terms of cost and of time, so if you are an adviser at the average age, which is somewhere in the 60s, then you would be a fool, if one of these consolidators comes knocking at the door with a big cheque, to turn them away.

"The consolidators are happy to buy these firms, even small ones, because they benefit enormously from the economies of scale, when it comes to compliance."