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Will consolidation in the adviser market dry up?

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Will consolidation in the adviser market dry up?

There has been some difference of opinion about whether or not consolidation in the adviser market will slow down.

At Money Marketing interactive in Leeds last week (5 May), Albemarle Street Partners managing director Charlie Parker suggested it will dry up off the back of rising interest rates and inflation.

He said we have “reached the moment of maximum consolidation” in the industry.

The reason for this is that consolidation is largely being driven by private equity money.

The increasing interest rate, which today rose by 25 bps from 0.75% to 1.00%, is making borrowing money more expensive.

This means buying IFA businesses is unlikely to continue to stack up.

Fairstone Group chief executive Lee Hartley strongly disagreed.

Responding, on LinkedIn, he said: “I don’t think I’ve heard a bigger load of tosh this year. For appropriately funded and capitalised firms an interest rate rise won’t make the slightest difference to their ability to continue to acquire.”

This fits with what SEI Asset Management Distribution head of advice solutions Russell Andrews suggested in March.

He told Money Marketingthere are many trends and factors that favour further consolidation of the advice market.

He insisted it will continue, and any suggestions it will slowdown are off the mark.

Shaun Wood, managing director at Simpson Wood Financial Services, said: “I think it could slow down, but not dry up, considering a lot of the money is [private equity] and not debt.

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