Close Brothers has seen a rapidly diminishing pool of IFAs for sale this year, due to high competition in the M&A market. In contrast to the high M&A activity of many firms recently, Close Brothers has experienced a relatively quiet year, acquiring two advice firms this year, which amounted to a 9% increase in the number of advisers within the firm.
The head of advice at Close Brothers, Andy Cumming, commented on firm’s predicament:
“There is definitely not as many firms around the £250m mark coming up for sale. The bigger IFAs don’t really come up that often and there are a few businesses like ourselves which are interested. Because not much has come up we have been quiet. I think over the last three or four years there have been a couple of new entrants [into the consolidation market].”
Nevertheless, Close Brothers’ relative inactivity in the consolidation market this year is not wholly down to a shrinking pool of medium IFAs, but also a more selective expansion strategy. Mr Cummings revealed that Close Brothers have taken a more “discerning” approach towards acquisitions, and are not willing to “overspend” to compete with other purchasers.
Despite low activity in the consolidation market, Close Brothers’ growth is looking relatively strong. Last week the firm’s assets under management grew to £9.5bn; in the first quarter of this financial year its assets grew by 6.5%.
