The squeezed middle: can mid-sized firms adapt to survive?

For financial advisers, coping with change is a way of life – whether that is driven by the regulator, shifting consumer demands, technology or a combination of all three.

Since the RDR came into force in 2012, the reshaping of the sector has been particularly dramatic, and with MiFID II last year there has been further movement. The wave of consolidation in recent years demonstrates the difficulty of remaining profitable against a backdrop of regulatory change and competition from robo-advice and other technology-focused alternatives.

Many argue there will always be a place for boutique IFAs and wealth managers who provide highly bespoke, face-to-face service, but demand for such an expensive option is already limited and likely to shrink further.

For Foster Denovo, synergies in culture between the smaller and larger firms are crucial to a successful merger. Chief Executive Roger Brosch says: “We describe ourselves as a facilitator rather than a consolidator. There are quite a number of consolidators out there who tend to be looking more at the numbers, assets and so on. They are quite fixed in the model that they use, so they tend to have a specific set of terms that they will offer and there is not a lot of flexibility in the deal structure”.

Read the full article on Money Marketing here.