There's a lot of consolidation going on in the world's wealth management sector and the author of this article examines the driving forces.

As readers know, the wealth and asset management sector is seeing consolidation and corporate change around the world. In the UK, we recently spoke to an expert about the dynamics shaping this consolidation. In the US we have covered the M&A that has been happening in the registered investment advisor and multi-family office space. There have also been cases in countries such as Germany, to give one example. 

How to interpret the shape and pace of events? To explore this is Felix Neate (pictured), associate director at LAVA Advisory Partners. (Details on the author below.) We are glad to share these ideas and welcome responses. The usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

As consolidation sweeps through the asset and wealth management sector, smaller firms hoping to set themselves up for a successful sale must understand precisely what entices larger buyers. It is no longer enough just to tick the financial boxes; understanding the strategic drivers behind acquisitions is critical for firms positioning themselves for investment or acquisition. 

The type and balance of companies that acquirers are looking for have changed in recent years. Historically, cross-sector acquisitions were attractive; wealth firms would buy tax specialists, boutique consultancies, or niche accountancy providers, and sell their offerings to the acquired company’s existing client base. 
But since the post-crisis regulatory tightening, this has changed significantly, with buyers favouring a more targeted approach. Today’s AWM buyers aren’t scooping up businesses just to broaden their offerings. Instead, they’re laser-focused on acquiring firms that fit seamlessly with their existing operations, especially when driven by pressing needs for scale, tighter profitability, and rigorous compliance.

According to SEI, over three-quarters of UK wealth managers plan acquisitions in 2025, with 75 per cent of those citing growth and scale as their primary motivation. With high-quality AWM firms more in demand than ever, well-prepared sellers are getting ahead of the game and establishing their needs and non-negotiables to secure the perfect partner.

Core vs non-core lines have hardened
Since the post-crisis regulatory tightening, wealth management’s outlook on non-core acquisitions has changed significantly. Wealth management operations now depend on tight alignment across compliance, remuneration, front-end advice and capital frameworks to secure profitability and support their unique operating model.

As a result, the focus has narrowed to three strategic non-core acquisition types. Regional or demographic reach is the most likely option, though not as popular as in other professional services. Where cultural and regulatory fit is solid, access to new client segments such as family offices or niche HNW groups is a bonus. Strategic geographic expansion still matters, but integration risk must be low. 

Secondly, acquirers can still be keen to buy Financial Conduct Authority-authorised investment managers or platforms to bypass lengthy authorisation routes. A firm that already controls capital and compliance is naturally more attractive than setting something up from scratch.

Finally, fund management and tech infrastructure can also be an option. Buyers are investing in firms with their own funds, distribution channels, or proprietary systems that can immediately plug into existing business models.

This tightening of non-core acquisition parameters has had a big impact on the core M&A market. The increased difficulty of diversifying means that the big buyers are looking for small, solid AWM firms with a strong client book, repeating revenue, and a pristine reputation. The targets that check all these boxes are now harder to find, and correspondingly more expensive. 

Smaller firms seeking to stand out need to highlight not just their current performance, but their ability to scale safely and integrate smoothly.

What buyers are really looking for
When preparing for sale, business owners must put themselves in the mind of the buyer and identify the key value drivers that must be clearly articulated and compellingly presented to maximise the opportunity. 

Firstly, predictability matters. Recurring, resilient revenue is a key value driver, but it’s also important to be able to show consistent, organic client growth.

The FCA’s heightened scrutiny means that any firm lacking rigour in suitability, reporting or governance is risk-rated and likely to take a valuation hit. Compliance is king, and being able to clearly demonstrate a clean compliance record and robust regulatory controls is very important.

Digital readiness is also a growing concern. According to PwC, 80 per cent of AWM firms say technology such as AI is a revenue driver, and 73 per cent of them emphasise M&A as a route to access that, so small firms with cutting-edge technical solutions are rapidly becoming prime targets.

Cultural and operational harmony are less tangible but incredibly important in people-driven sectors where relationships are so influential. Smaller teams that share the acquirer’s ethos, systems, and sales processes reduce friction and risk.

Additionally, the market is watching out for integration readiness. A recent SEI study showed that only 58 per cent of firms planning acquisitions had proper integration resources, and 19 per cent paused activity mid transaction due to capability mismatches. Sellers keen to protect their legacy and client loyalty need to consider potential buyers’ integration strategies, ahead of any transaction, to ensure the best possible chance of success.

The AWM M&A outlook
With strong growth expectations for deals in the sector, consolidation continues apace, and buyers are jostling for the best targets. Quality is now far more important than quantity, and for smaller AWM firms wanting to catch the eye of a larger player, the criteria are clear: scalable revenues, tight compliance, digital aptitude, cultural alignment, and operational unity.

Sellers that enter the market prepared can both maximise their valuations and ensure that they're only considering partners that can protect and grow everything they’ve built to date.

About the author
Felix Neate, associate director at LAVA Advisory Partners, has trained in accountancy. He has worked in a range of businesses including in areas such as M&A advisory.