The ten largest wealth firms in the UK have expanded their grip on the market, serving nearly the entirety of the country’s client base.
The firms served up to 89 per cent of the discretionary client base in the previous tax year, according to the latest wealth management survey from the Financial Conduct Authority (FCA).
This is a sharp increase from the 74 per cent market share they held in the 2023/24 tax year.
The uptick in client numbers reflects the wave of consolidation engulfing the sector, as smaller firms find themselves swallowed up by private equity firms and larger competitors.
Larger groups are looking to scale and outsource work to smaller providers amid increased regulation and the need to cut costs.
Earlier this year, Evelyn Partners was snapped up by Natwest for £2.7bn, while Cannord Wealth is also aiming to get a sale of its UK wealth division over the line.
Rob Hillock, head of financial planning at Broadstone, said: “Greater scale can support investment in technology, compliance and client service, but consolidation must ultimately translate into better outcomes for clients.
“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.”
The UK’s largest wealth firm, St James’s Place, boasts over £240bn in assets under management (AUM). Other market leaders include Quilter and Rathbones.
AUM falls
But despite bigger firms luring over the vast majority of UK clients, their share of AUM slipped. Total AUM dropped three percentage points to 59 per cent in the 2024/25 tax year, down from 62 per cent the year before.
This reflects smaller firms being unlikely to serve ultra high net worth clients, causing them to bring over very little relative AUM.
But the regulator’s report suggests the push to take control of more of the market is not likely to slow down in the next few years.
Over 40 per cent of wealth firms confirmed they planned to acquire another firm, grow revenue or increase their client base by more than 25 per cent in the next two years. But nearly 20 per cent said they are “considering winding down or selling all or part of their client base” as they continue to feel the effects of a concentrated sector.
The watchdog warned firms looking to consolidate to avoid doing so at a pace which does not reflect the current state of its business.
The FCA said: “We have also seen that if fast growth of these businesses is not managed effectively, it may create poor outcomes.
“These could include poor client service, weaknesses in business continuity and in some cases disorderly failure. As firms grow, governance, oversight and controls need to keep pace, so clients receive consistent outcomes.”
