Changes in regulation, technology, and an ageing demographic of business owners has led to consolidation within the sector, and this is likely to continue for the coming years.
This consolidation has been driven by a number of larger industry players making bolt-on acquisitions as well as general merger and acquisition activity, in addition to the rise of private equity investment into consolidators within the market.
Consolidation provides limited, and perhaps undesirable, options for advice firms, and many are looking for alternatives to consolidation where they can continue to provide authentic independent financial advice, support clients in their best interest and potentially access liquidity and growth capital to turbocharge their business and succession plan.
The digital transformation and shifts in consumer behaviour will also continue to reshape the IFA network sector.
For example, a network proposition will increasingly need to have fully integrated systems that create efficiencies, improve the advice process and provide a better user experience for advisers and clients alike.
It will also need a strategy for using technology to support data-led decision-making and monitoring if it is to solve the key barriers for operating at scale at lower risk while supporting better client outcomes.
Looking into 2024, the key benchmark for defining a modern network and a robust framework to support an IFA business is the trajectory of its value proposition for advisers, and specifically that it should improve over time and with scale, while reducing cost and complexity.
In addition, it must provide a framework that can empower advisers to deliver positive client outcomes and support clients in their best interests.
While many in the industry may aspire to this, it is only possible with innovation, conviction and a commitment to invest in technology and champion independent financial advice, now and into the future.
Angus MacNee is CEO of IFA network and succession solution ValidPath
