Almost three-quarters of advice businesses are looking to expand and the proportion of business owners looking to sell has plummeted since 2015, a survey has shown.
Harrison Spence’s latest Adviser Views survey, which was completed by 350 financial advisers, showed one in five firms were on the acquisition trail, actively looking for new businesses to buy.
The proportion planning to sell is at historical lows – with just one in five looking to sell in the next five years compared with just over half in 2015.
Just 2 per cent of those surveyed are looking to sell in the next 12 months, 5 per cent in three years and 15 per cent in five years.
Those with no plans to sell have increased from 41 per cent to 61 per cent in the same time period.
Brian Spence, founding partner of Harrison Spence, said: “Now that the dust has settled following the Retail Distribution Review and the regulator’s examinations of fees, advisers can focus on what they do best – providing sound financial advice to clients.
“The population needing advice is growing and with a shortage of good IFAs left in the industry, clients are coming to them.
“IFAs are intrinsically motivated and this ambition corresponds with what we are seeing in the market at the moment, with almost 100 engaged acquirers of all sizes on our book at present.
“Rather than feeling threatened and rushing to sell as they might have done a couple of years ago when the landscape was less clear, those advisers that remain in the industry feel confident of future business success and are making hay while the sun shines.”
The survey also found that 3 per cent of advisers wanted to expand through acquisition but were unable to obtain the right finance.
Half were looking to fuel expansion organically and recruit more staff.
Last month Tilney revealed it was in talks with six other financial adviser firms, following its recent takeover of Towry and Ingenious Asset Management.
The 360-strong financial adviser business, known as Tilney Bestinvest until earlier this year, bought Towry in April last year, at a cost of £600m, backed by finance from Tilney's majority, private equity, shareholder, Permira.
The company also bought Ingenious Asset Management, the discretionary fund management business, in February last year.
Also last month AFH posted profits of £1.7m for 2016, increased by 43 per cent on the previous year, and revealed it had cash reserves of £6.7m set aside for acquisitions.
damian.fantato@ft.com
