An ageing profession and a growing challenge. Financial adviser consolidation is a key issue shaping the industry today.
Many financial advisers are approaching retirement. This raises an important question about financial adviser consolidation and its impact on succession plans.
What happens to clients when their adviser steps back?
At Manning Gee Investments, our planning team is under 50. Even so, succession planning matters, because clients should never be an afterthought. For us, understanding adviser consolidation in a financial context is key to maintaining quality client service.
The rise of consolidation in financial advice
The financial advice sector has seen increasing consolidation, often driven by private-equity-backed firms acquiring smaller practices. Financial adviser consolidation is particularly evident in this trend, impacting how firms grow and merge.
There are benefits:
- Investment in systems
- Operational scale
- Broader resources
But there are also risks, particularly around service continuity and client experience. With adviser consolidation, the financial landscape may shift in ways firms need to anticipate.
The FCA has publicly acknowledged that consolidation brings both opportunities and challenges, especially when it comes to protecting long-term consumer outcomes. Financial adviser consolidation requires careful oversight to ensure positive results for clients.
Why continuity matters so much to clients
Financial advice is built on relationships. At the same time, the trend toward adviser consolidation can change the dynamic between clients and firms.
When firms are sold, and advisers move on a few years later, clients can experience:
- Loss of personal connection
- A shift from advice to process
- Feeling like a number rather than an individual
This doesn’t mean consolidation is inherently wrong, but it does mean how it’s handled matters, particularly in the context of adviser consolidation in the financial advice profession.
An alternative approach: values-aligned succession
Another route we increasingly see is firms selling to smaller, like-minded businesses. In reality, this can offer a very different path compared to adviser consolidation into much larger financial groups.
This approach often involves:
- Gradual handovers
- Shared values and culture
- Long-term planning
- Clients being part of the transition
Industry bodies such as the Personal Finance Society have highlighted the ageing adviser population and the growing importance of succession planning across the profession, which links closely to ongoing debates around financial adviser consolidation.
For clients who value personal service, this model often feels more reassuring.
Keeping clients central to the process
No one can predict what will happen in 20 or 30 years. But one principle should remain constant: careful consideration of financial adviser consolidation and its effects on client outcomes is essential.
Clients should never be secondary to a transaction.
Under the Consumer Duty, firms are expected to consider foreseeable risks to consumer outcomes — including how changes in ownership or advice relationships may affect clients over time. The financial adviser consolidation trend makes this focus on client security vital.
For clients, it is increasingly important to understand how their adviser thinks about the future. Sometimes, the risk of adviser consolidation can influence decisions about which firm to trust.
If you value personal, relationship-led advice and feel this has changed following consolidation, it may be worth exploring your options. This is especially true as financial adviser consolidation becomes more common.
General disclaimer: We sourced the data from external providers. While we strive for maximum accuracy, we cannot guarantee the reliability of the data they supply. The author writes the introduction from their perspective, reflecting their views, which may not align with those of Manning Gee Investments. Anyone considering a product or service based on this blog should seek professional advice or conduct their own research before deciding. The author bears no liability for decisions made based on this blog. Investments can rise and fall in value, and the return at the end of the investment period is not guaranteed—you may receive less than you originally invested.