Michael Carter, founder and chief executive of BizEquity, also believes M&A transactions could rise by around 40% over the next five years.
However, while many industry observers agree transaction volumes in the sector could be set for a significant rise, they say behind the average growth in value lies a split between those firms that adapt to the sweeping changes emanating from the Retail Distribution Review and those who do not.
Carter said the RDR was a big contributor to the likely rise in M&A activity, as smaller firms partnered up with larger businesses that could afford the compliance infrastructure.
“There are some aggressive acquisitions fuelled by private equity interest looking to get into the wealth management space,” he said.
BizEquity, a US-based provider of cloud-based business valuations, claims to have valued more than 29.4 million firms to date.
It set up in London in February using Companies House data to build its database.
According to this data, the average UK wealth advisory firm has increased in value by 7.8 % in the year to June 2015 over the previous year.
This compares with around a 10% rise in the value of the average US wealth manager.
This is unusually high, typically it is 2-3% a year,” said Carter.
Sweeping changes
However, behind the average growth in business values lies a likely split between those in the industry that adapt to the sweeping changes under way and those who do not.
In particular, industry observers point to the April 2016 deadline set by the FCA to end remaining platform cash rebates from a fund’s annual management charge.
