Consolidation, succession planning - adviser's thoughts needed!

Most small IFA firms value is with the owner, and it’s tough to sell businesses like this unless it’s a consolidator through the assets under management. This doesn’t always lead to good customer outcomes, and the first thought of sellers should be what firm fits with their ethics. Larger firms can be sold based on profit and EBITDA, so it tends to be easier to find an appropriate firm to acquire then through a broker. M&A in financial services can be tricky and the due diligence extensive. The regulations mean it’s risky and that also means costly.

Because many instinctively know that most consolidation stories are driven by capital, not clients. There is a real fear of losing independence, being pushed into product led behaviour, and seeing client service become a KPI rather than a philosophy.
I don’t believe selling to a consolidator is in clients’ best interests in most cases. Advice businesses exist to serve people, not balance sheets. Once advice is optimised for exit multiples, leverage and investor timelines, client outcomes inevitably become secondary.
A proper succession plan protects clients first, then staff, then value. It allows continuity of advice, preserves culture, and avoids forced, rushed decisions when life happens.
Lots of advisors don't plan for it because markets are busy, profits are good, and succession feels like a “tomorrow problem”. But tomorrow has a habit of arriving suddenly, and firms without a plan rarely exit on their own terms.