89% of wealth management clients now served by 10 largest firms, FCA finds
Its market study found 41% of wealth managers intend to acquire another firm, increase revenue or grow their client base by more than 25% in the next two years.
The 10 largest wealth management firms now account for 89% of clients in 2024/25, up from 70% in 2022/23, the Financial Conduct Authority’s (FCA) latest market study found.
41% of wealth managers intend to acquire another firm, increase revenue or grow their client base by more than 25% in the next two years.
18% are considering winding down or selling all or part of their client base.
The FCA found mixed outcomes around fair value and whether the price paid is reasonable for the service received.
Some firms had not fully considered how pricing, including fixed fees, affects clients with smaller portfolios.
The FCA’s Financial Lives 2024 survey found 17% of adults with investible assets of £100k plus who used a named wealth management firm were concerned about fees being high, hidden or complex.
Rob Hillock, head of personal financial planning at Broadstone, said: “The FCA’s findings show how quickly consolidation is reshaping the wealth management market, with the largest firms now serving a much greater share of discretionary clients.
“Greater scale can support investment in technology, compliance and client service, but consolidation must ultimately translate into better outcomes for clients.
“As firms grow through acquisition, maintaining service quality will be critical to expanding in a sustainable and effective way.”
Hillock added: “The real test will be whether larger platforms can use their scale to deliver a better, more consistent client experience without losing the personal service and responsiveness that many investors value.
“There is clearly room for improvement around fees, where firms need to ensure their charging structures are transparent and appropriate for clients with different portfolio sizes, particularly as larger wealth managers increasingly serve a broader range of customers.”
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