Consolidators Are Killing Off Financial Planning: Is the Future at Risk?

The financial planning industry is undergoing a silent transformation, one that threatens its very essence. Private equity-backed consolidators are swooping in, buying up smaller, boutique financial planning firms that traditionally place more emphasis on client-centric planning than on the mere management of assets. What this creates is a worrying shift: the disappearance of true financial planning, replaced by jobs that focus solely on servicing assets under management, under the blanket term of “financial advice.”

What’s Happening to Financial Planning?

Many of these smaller firms, often the bedrock of personalised financial planning, are finding themselves lured by the promises of private equity. Rather than modernising their services or adopting new technology to improve client outcomes, they are being absorbed into larger conglomerates. These consolidators, in turn, focus less on bespoke planning and more on hoovering up assets under management (AUM) for larger fees.

Alex Twiss, managing director of London-based advice firm Connor Broadley, touched on this in his recent remarks. Twiss highlighted how these consolidators, now numbering 38 in the UK, are actively stifling innovation and growth within the advice sector. Rather than investing in technology and forward-thinking strategies, smaller firms are being rolled up into centralised structures, losing their individuality—and more importantly, the core focus on financial planning.

Why Does This Matter?

Financial planning should be about more than just managing assets; it’s about supporting clients through life’s significant moments, providing clarity, and offering personalised guidance. Unfortunately, the trend towards consolidation means that much of this is being lost in favour of streamlined, less personalised services.

For many advisers, this shift represents a cultural shift away from what drew them to financial planning in the first place. Clients are no longer getting the same tailored advice. Advisers, on the other hand, are expected to adopt new, rigid processes that lack the flexibility or personal touch of old. As Twiss pointed out, this can create negative outcomes not only for the advisers but also for the clients who rely on their advice.

What Does the Future Hold?

With the FCA reviewing the consolidator market, there is hope that some of the more harmful practices will be reined in. But in the meantime, the financial planning propfession is facing an existential challenge: the erosion of true financial planning as it becomes a subsidiary to servicing AUM.

For those passionate about financial planning, now is the time to stand firm. Smaller firms that embrace modernisation and leverage technology have the potential to thrive without selling out. And for clients seeking genuine, personalised advice, it’s important to remain vigilant and choose firms that prioritise planning over AUM.

The future of financial planning rests in the balance, but it’s not too late to steer the ship back on course. With the right focus, we can ensure financial planning continues to thrive, putting people before profits and long-term wellbeing ahead of short-term gains.

This article serves as a reminder that financial planning is not just about managing wealth—it’s about managing lives. Let’s ensure that this vital service remains at the heart of the industry, for the benefit of both advisers and their clients.