Despite tougher regulations in 2025, demand for high-quality advice firms remained strong, according to Louise Jeffreys, founder of Gunner & Co. She described the year as a bridge between the rapid consolidation of earlier periods and a more disciplined, regulator-led era.

“Consolidators that moved quickly to shore up governance, integrate robust risk management, and demonstrate sustainable business models attracted strong interest,” said Jeffreys.

“Conversely, weaker players — particularly those with loosely structured debt, minimal compliance infrastructure, or poor client servicing records — faced delays. Some transactions were repriced, and others were abandoned if the buyer couldn’t achieve change of control.”

FCA’s consolidation review: Raising the bar

The defining event of the year was the FCA’s multi-firm consolidation review, published on October 31. The regulator highlighted that well-managed consolidation supports efficiency, innovation, and resilience but warned that the previous “light-touch” approach was over.

Jeffreys noted that the FCA now expected:

  • Detailed governance

  • Prudent debt management

  • Group-level risk oversight

  • Comprehensive integration planning

  • Robust consumer outcome protections

Consolidation trends and market impact

Tom Hegarty, CEO of SimplyBiz, described consolidation as a continuing force. Private-equity-backed consolidators scaled aggressively, seeking assets, advisers, and recurring revenue.

Hegarty highlighted a strategic challenge: consolidation reduced the number of advisory firms, risking diversity, competition, and consumer choice. Delayed succession planning often forced smaller firms into consolidators’ hands, sometimes under urgent circumstances.

Regulatory scrutiny shaping deals

The FCA review emphasised risks around highly leveraged acquisitions and the importance of strong governance, integration, and client outcomes. Buyers increasingly assessed targets for compliance, service quality, MI robustness, and change-of-control readiness.

Insights from the September FT Adviser buyers roundtable, hosted by Gunner & Co., showed that weak compliance or service records could pause deals, while urgent seller timelines sometimes led to discounted valuations reflecting execution risk.

Hegarty warned that clients could be shifted into new pricing or investment approaches benefiting the acquirer. He expected consolidation to remain an active supervisory area in 2026, with firms needing proactive preparation, whether planning a sale or not.

The bottom line

Jeffreys summarised that while consolidation continued in 2025, the market shifted toward greater discipline. Fewer deals occurred, but quality and compliance standards rose. National buyers prioritised sustainable value, integration, and compliance, while regional buyers found opportunities in smaller transactions, provided they met rigorous due diligence and integration requirements.

If you’re considering selling your advice firm, contact Gunner & Co. to discuss how to position your business for a smooth, successful transition.