M&A Perspectives - What can we Expect to see Happen with PE?

Financial Advisory

22 June 2023

Advisory DistributorsConsumer DutyFinancial AdvisoryM&AMarket TrendsTechValuation

Expert: Roderic Rennison, Partner, Catalyst Partners Facilitator: Don Wild, Founder Wild Ochre Consulting


  1. There still remains a huge market
  2. The likelihood is that a full ‘consolidation model’ rather than an aggregator is the way forward
  3. M&A activity is dominated by PE, with circa 32 players in the market
  4. Valuations have been rising, due to increased demand and increasing scarcity of ‘quality firms’
  5. Current market:
  • £1.9 trillion dollars
  • Just under 90% of firms have 5 or fewer advisers
  • Market growing at 8%
  • Recurring revenue scheme
  • Access to clients


A few ‘voices’ are now saying we have peaked; however, the room was split on this issue. One set of logic does say we are at or near the top of the Valuation multiples.

Increasing cost of money, and a deeper understanding of the difficulty of ‘integration ‘has led to some PE to ‘pause’. However, the demand still remains high, and the simple fact is, investors see a recurring income model as very attractive.

Aggregation herds people together, but the hard work of streamlining and integrating processes and particular culture remains. Furthermore the Consumer Duty will place a much greater focus on the services and value provided. Hence, a deep understanding of all the Financial Advice firm is required, from a regulatory perspective, but also for an advice firm to be successful, in this more closely scrutinised world.

There was lively debate on whether there would be a great deal more PE activity, and whether consolidation would continue. The conclusion was, that consolidation would continue, however some of the smaller players may withdraw, or themselves be consolidated.

There was broad agreement on the key summary findings by Catalyst Partners from the attendees. Essentially there is more of the road to run.

Key takeaways:

  • Valuations at or very near the top
  • Some smaller PE is likely to leave the market
  • Greater insight and knowledge is needed on which are the attractive firms to buy
  • Consumer Duty will focus minds on the eventual ‘operating model’ of the firm
  • Tech will play a bigger part, as the profession starts to realise the importance of the integration of ‘tech stacks’
  • The bigger firms will focus on the ‘advice gap’ using models powered by tech, whereas Financial Planning firms will focus on personal service ‘supported by tech’