Harrison Spence, which specialises in preparing IFA mergers and acquisitions, has reported more enquiries looking to make a purchase than looking to sell.
The figures add an extra dimension to figures gathered by International Adviser which show an industry still shrinking under regulatory pressure and fee compression.
The UK firm acts for both seller and acquirer as an independent party as an alternative to corporate finance or a broker.
Alan Marks, managing director, Harrison Spence comments: “Whilst I believe this is a good omen for our industry, I must confess that we at Harrison Spence now find ourselves in the unusual position where we have more people wanting to buy than sell.
“As the years go by, many IFAs feel they would like to spend more time away from the office or simply have someone take over the day to day “glue” of the business and concentrate on just doing the nice things like seeing clients.
“For example, some purchasers are more than happy to have a former owner have some or quite a lot of involvement with the business and we can help structure a deal that fits in with your own personal set of circumstances.”
More consolidation to come
Phil Billingham, IFA and industry researcher with Cisi said he wasn’t surprised by the development but could still see consolidation had a way to go yet.
“The industry has retreated so much and we have lost so many advisers that the people left are pretty good at surviving and are profitable,” he said
“When a business is profitable owners would rather run it than sell it.
“The industry still has some consolidation to go, for example, when you look across other professions and regions you don’t see one-man band advisers anymore.”
Billingham has just completed a bench marking survey for the Financial Planning Institute of South Africa and found advisory firms there are twice as big as they are in the UK.
He believes the findings, to be published later this year, are partly a factor of lower GDP in South Africa driving the need for scale, but also an indication of where advice in the UK and other jurisdictions might be in a few years.
