A generational shift is set to happen among independent financial advisers (IFA) – and older advisers will find out if they were right to follow their own retirement planning advice.
This is because research shows many IFAs are looking to retire and sell their businesses, according to Investec Wealth & Investment findings.
Just over 40% of IFAs surveyed believed owners of financial advice firms will sell their businesses in order to retire or semi-retire, triggering a spate of M&A in the sector.
Thirty per cent of advisers plan to sell their businesses entirely on retirement, the research found.
Investec surveyed 94 advisers and the findings suggest M&A among small IFA firms is set to increase over the next two years.
Just under 40% also forecast a rise in M&A amongst larger firms, too, as the industry continues to consolidate.
As well as retirement, other factors in M&A are regulation and technology. Technology is creating more efficient business models, the research found.
Mark Stevens, head of intermediary services at Investec Wealth & Investment, said: “M&A in the IFA sector will continue apace over the next few years as advisers belonging to the baby boomer generation will be looking to hang up their boots. When you add the impact of new and more complex regulation and better technology you have an ideal environment for consolidation.”
Advisers said the biggest factor influencing their decision on which firm they would sell to is ensuring a high level of client service.
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