This includes tapping into cost synergies, consolidating platforms, and vertically integrating functions like in-house investment management.
Looking ahead, we anticipate an acceleration of M&A among smaller firms, along with the eventual sale of consolidation entities by sponsor owners once attractive returns are achieved.
These entities could merge with other consolidators, be acquired by larger sponsors to sustain the momentum, or become targets for banks and insurance companies.
However, not all wealth businesses have the same value creation model; careful presentation of the business and the investment case is increasingly important for unlocking premium valuations.
While the UK has faced a number of significant challenges in recent years, a lowering of rates could provide renewed optimism for the economy as we advance further into 2024.
But irrespective of broader macro prospects, we expect the multiple tailwinds powering the dynamic wealth management space to continue apace for the foreseeable future.
Hugh Elwes is managing director at Stephens, an international financial services firm
