The FCA’s consolidation review may not have introduced ground breaking views, but how these principles are applied will significantly impact adviser firm deals in 2026. Firms will face stricter requirements, making the M&A market more challenging for some buyers.

Stricter Requirements for Acquirers in 2026

Louise Jeffreys, managing director of Gunner & Co., outlined the hurdles ahead:

“Firms looking to acquire in 2026 will probably need to provide detailed evidence on group debt strategy, stress-testing, solvency, integration road maps, governance structure (including independent oversight), risk management, MI capability, and clear conflict-management frameworks, alongside how any transaction will align to the consumer duty.”

These demands could reduce the pool of credible buyers, particularly smaller firms that lack the resources to evidence compliance. Buyers unable to meet these standards—or who fail early on governance, debt, or conflict management—may find themselves effectively frozen out of the M&A activity market.

“I expect the number of aborted or delayed deals to rise, especially among smaller mid-tier acquirers.”

Quality Over Quantity

For smaller firms, operational efficiency and strong compliance will drive a “quality premium.”

“Firms with patchy compliance and weak MI will struggle to attract interest,” Jeffreys said.
“This isn’t a market that typically sees low-ball offers for less attractive businesses; they may simply be left with no (credible) buyer option.”

Notable buyers, including Amber River and One Four Nine Group, plan to restructure or switch equity partners in 2026. While this could provide fresh capital to accelerate integration and technology investment, it may also lead to strategic shifts when swapping out PE for trade buyers.

Integration as the Key Driver of Value

Deal value will increasingly focus on long-term outcomes rather than headline multiples. Critical factors will include adviser retention, compliance, system migration, client service consistency, MI-driven performance monitoring, cost-to-serve analysis, and consumer duty-aligned client outcomes.

“Acquirers with strong operations and compliance teams — and those embracing technology — will outperform,” Jeffreys noted.
“For many buyers, integration risk will trump size or revenue when evaluating targets.”

For vendors, readiness is crucial. Clean compliance records, well-documented procedures, and robust MI will make firms appear “regulatory-friendly, low-risk, and easily integrated.”

“Vendors who position themselves carefully will almost certainly benefit.”

Outlook for M&A in 2026

Overall consolidation in advisory sector may slow as buyers become cautious and the change-in-control process takes longer. However, quality consolidation is expected to grow, resulting in fewer but more financially resilient and better-governed advice platforms.

Human capital remains central. Firms that continue investing in adviser recruitment, retention, and development will have a competitive advantage in negotiations, making skilled personnel a key differentiator in 2026.

“With high regulatory demands — consumer duty, ongoing suitability reviews, MI, integration burden — the need for capable advisers remains acute,” Jeffreys concluded.