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The forces driving a new wave of consolidation among financial advisers

Advice market braces for wave of consolidation as one third consider selling their business

  • One third (32%) of advisers are considering selling their business, with rising risks driving large-scale change in the market
  • Two in five (38%) advisers believe they would need to sell their business to a larger organisation
  • Over a third (35%) believe they need to change their marketing strategy in order to appeal to millennials

Rising risks are driving large-scale change in the financial advice market, with one third (32%) of advisers considering selling their business, according to new research from Canada Life.

Among advisers considering selling their business, four in ten (38%) believe it will be to a larger organisation. The findings reveal that a new wave of consolidation is primed to grip the industry in reaction to the pressures of regulation, economic volatility and cybercrime, among other risks.

Meanwhile, nearly two in five (37%) advisers are considering withdrawing from certain markets, while one in three (28%) are considering retirement.

Figure 1 – The measures advisers are considering taking in response to industry risks

Selling the business 32%
Retiring 28%
Changing the business model 18%
Expanding 10%
Merging 7%


Neil Jones, Tax and Wealth Specialist at Canada Life, said:

“There is a clear signal that advisers are feeling under pressure, which is catalysing change in the industry.

“When they look at the future, advisers who are looking to sell expect to be acquired by a larger organisation, rather than merge with a smaller firm. In short, the industry looks set for a fresh wave of consolidation. The benefits of scale are clear, but it may also be possible for advisers to gain some of those benefits by forming networks and strategic alliances.”

Attracting a new generation of clients

In the hunt for new clients, Canada Life’s research also reveals how advisers are focused on attracting the younger generation.

Over a third (35%) of advisers feel that appealing to millennials would require a change in marketing strategy, particularly one which involves increased use of technology and social media. A third (33%) believe that a more technology-based service – rather than one centred on face-to-face meetings – would appeal to the younger generation.

Almost three in ten (28%) believe that creating an intergenerational strategy around working with existing clients would appeal to millennials, but only one in 20 (5%) think that it would be necessary to change the way they charge for their services.

Figure 2 – The measures advisers would take to attract younger clients

Change how you market to customers, e.g. increased use of technology, social media 35%
Provide a more technology-based service rather than face-to-face 33%
Create an intergenerational strategy around working with existing clients 28%
Don’t believe I will have to change my strategy 24%
Do not want to attract younger clients 19%
Automate the advice and review process 14%
More transactional approach 11%
Change the way we charge 5%

Neil Jones, Tax and Wealth Specialist at Canada Life, said:

“Intriguingly, a quarter of advisers don’t believe they need to change their strategy. This suggests that they have either already changed their strategy to attract younger clients, or that demographic isn’t a priority. Regardless, advisers know that times are changing and creating an intergenerational strategy around existing clients is a great way to capture the next generation.

“In fact, there are some advisers whose yardstick for success is ensuring they capture all the family business – that means dealing with existing clients and their beneficiaries both individually, for their own needs, and collectively. This is hard work, but pays dividends when it comes to building a business for the future.”

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.