There was 111% jump in the value of M&A activity involving IFA firms worth more than £5m ($6.4m, €5.75m) in 2019.
Across the sector, it rose to £249m from £118m a year earlier.
According to data collated from mergers and acquisitions adviser Imas Corporate Finance, the number of £5m+ deals last year came in at 11, which is a rise from seven in 2018.
The average value of deals in 2019 was £22.63m.
Only one acquisition by an IFA network broke through the £5m barrier in 2019.
“We are seeing a natural evolution, year-on-year, with firms of greater scale coming to market on a regular basis,” Victoria Hicks, director of M&A consultancy firm City & Capital, told International Adviser.
“The number of transactions completed are at a record level and we are seeing new breeds of acquirer enter the IFA space with regularity, offering a wider range of options as the market evolves.”
No sign of slowdown
The Imas Corporate Finance data also found five listed companies bought IFA firms, while four private equity-backed firms made M&A deals in the financial advice space last year.
One privately held business also spent money in the sector.
Hicks added: “Both domestic and international private equity-backed firms are identifying significant opportunities to acquire large-scale, reputable, quality firms within the sector, financially out of the reach of the masses.
“We have found that these new entrants combined with the more traditional consolidators and providers are making for an exciting period of activity for the financial advice M&A sector and is showing no sign of slowdown.”
Reviewing range of options available
In 2019, six privately held IFA firms were sold, while three listed companies and two ‘widely held’ businesses completed deals.
“Whilst there are highly publicised and very real concerns, in particular with regards to defined benefit (DB) liability and the professional indemnity (PI) insurance market, companies and investors continue to seek acquisition opportunities.
“For those retiring or seeking a capital event, there has never been a better time to review the wide range of options available.” Hicks added.