The recent NextWealth report makes interesting reading and a number of excellent points. The central argument that a number of PE-owned consolidators are likely to themselves be acquired over the next 18 months is very likely to be correct given the maturity of many of the funds backing them.
Roderic Rennison of Catalyst Partners is also correct that as a result and in the near term potential sellers may have a smaller pool of buyers from which to choose. However, the M&A market in the financial advice space has proved a resilient one over many years, and opportunities continue to exist for ambitious and high-quality businesses.
It isn’t new that most potential sellers are also on the lookout to acquire firms or books that are likely to enhance their offering. Whilst regulatory diligence has never been more important, it is also a driver of activity and quality and therefore, indirectly, growth. We have clients in exactly this position, with strategies to grow which are not dependent on private equity funding.
To misquote Mark Twain, reports of the death of advisor consolidation have (so far) been greatly exaggerated.