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Private equity capital has reshaped large parts of the UK and US financial advice markets over the past decade. Consolidation has accelerated, valuations have risen, and operating models have become increasingly ambitious. On paper, the rationale is compelling: scale, professionalisation, margin expansion, and a clearer path to exit.
From an investor and board perspective, these strategies are rational. Centralisation promises stronger oversight, improved consistency, and operational leverage across growing groups. Yet an uncomfortable reality is emerging across many consolidators. Despite significant investment, complexity is increasing rather than reducing, and service quality is proving harder to sustain at scale.
The root cause is often misdiagnosed.
It is tempting to point to regulation, adviser shortages, or the rising cost of compliance. In practice, the biggest structural risk in advice consolidation today is fragmented technology combined with short-term thinking.
When technology is treated as an afterthought
In many acquisitions, technology decisions are deliberately deferred. The focus is on completing the transaction, retaining advisers, and maintaining continuity. Systems are inherited firm by firm, with the expectation that integration and rationalisation will follow later.
What follows instead is a patchwork. Multiple CRMs, different planning tools, inconsistent client portals, and bespoke processes embedded across the group. Integrations are promised, roadmaps are produced, but genuine unification rarely materialises.
This does not create scale. It creates fragility.
Technology in an advice group is not simply a collection of software tools. It is the operating infrastructure through which advice, compliance, service delivery, and trust are executed. When that infrastructure is fragmented, every downstream outcome suffers.
The impact on advisers and clients
For advisers, the consequences are immediate and practical. Time that should be spent preparing for client meetings, thinking strategically, or deepening relationships is instead consumed by rekeying data, navigating inconsistent workflows, and working around systems that were never designed to operate together.
Friction becomes normalised. Productivity stalls. Confidence in the platform diminishes.
For clients, the impact is quieter but more corrosive. Onboarding takes longer than expected. Information has to be repeated. Communications feel disjointed. Reviews become more transactional. Many clients struggle to articulate exactly what has changed, only that the experience after acquisition feels slower, more distant, and less personal than before.
This is particularly problematic in an environment shaped by Consumer Duty, where firms are expected not only to deliver good outcomes, but to evidence them consistently and proactively.
Compliance becomes harder, not easier
One of the central promises of consolidation is improved compliance through standardisation. Fragmented technology undermines that promise.
When data is spread across multiple systems, audit trails become harder to assemble, oversight becomes more manual, and governance relies increasingly on process rather than design. Central teams invest heavily in compliance resources, yet still find themselves managing risk firm by firm rather than at group level.
In some cases, technology decisions intended to simplify operations actively increase regulatory exposure.
A transatlantic pattern
While regulatory frameworks differ between the UK and the US, the underlying dynamics of advice consolidation are strikingly similar. Rapid acquisition strategies, inherited systems, and deferred technology decisions are creating the same operational strain on both sides of the Atlantic, with advisers and clients experiencing many of the same unintended consequences.
This suggests a structural issue rather than a local or regulatory one.
The hidden risk of conflicted technology relationships
A further risk is often overlooked at the point of selection. Many advice groups lock themselves into long-term technology relationships that restrict future optionality.
This includes vendors whose parent groups have ambitions elsewhere in the value chain, including platforms, propositions, or distribution models that may eventually compete with their own clients. It also includes architectures that make change expensive, slow, or politically difficult once embedded.
These relationships may appear efficient in the short term, but they introduce strategic risk over the life of the investment.
The familiar consolidation outcome
The result of these decisions is increasingly predictable. Complexity accumulates. Integration costs rise. Promised efficiencies fail to materialise. Over time, the operating model becomes harder to evolve rather than easier to scale.
When growth slows or market conditions tighten, the remaining option is often another sale, frequently at a discount, with parts of the original investment written down. End clients ultimately bear the cost through weaker service and poorer experiences than those they enjoyed before consolidation.
A different path is possible
None of this is inevitable.
There is a clear alternative for consolidators willing to treat technology as a strategic foundation rather than a post-deal procurement exercise. That means making architecture decisions early, selecting independent and modular platforms, and designing operating models that support advisers, strengthen compliance by default, and deliver genuinely consistent client journeys across the group.
Crucially, these decisions must be made from day one, not once complexity has already set in.
Conclusion
The next phase of advice consolidation, in the UK, the US, and beyond, will be shaped less by the volume of capital deployed and more by the quality of early operating decisions. In particular, how technology is positioned from the outset, whether as a tactical toolset or as core operating infrastructure, will increasingly determine outcomes for advisers, clients, and investors alike.
Having worked closely with wealth managers, advisers, and consolidators navigating these challenges, it is clear that many of the hardest problems emerge not after scale is reached, but because foundational decisions were deferred for too long. These conversations are most effective when they happen early, before complexity becomes embedded and optionality is lost.
For those thinking seriously about long-term consolidation strategy, operating models, and the role of technology in delivering sustainable growth and good client outcomes, thoughtful discussion at an early stage can make a material difference.
