UK’s largest wealth firms tighten their hold on the market

The ten largest wealth firms in the UK have significantly expanded their market presence, serving nearly all of the country's client base. According to a recent survey from the Financial Conduct Authority (FCA), these firms catered to up to 89 percent of the discretionary client base in the previous tax year, a marked increase from the 74 percent market share they held in the 2023/24 tax year.

This surge in client numbers is attributed to sector consolidation, as smaller firms are being absorbed by private equity firms and larger competitors.

These larger groups are leveraging their growth to outsource tasks to smaller providers amidst heightened regulation and the necessity to reduce costs. Earlier this year, the wealth management firm Evelyn Partners was acquired by Natwest for £2.7 billion, while Cannord Wealth is also in the process of finalizing a sale of its UK wealth division.

Rob Hillock, head of financial planning at Broadstone, commented, "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."

Despite the dominance of larger firms, their share of assets under management (AUM) has decreased. St James’s Place, the UK’s largest wealth firm, now manages over £240 billion in AUM, but overall AUM has fallen three percentage points to 59 percent in the 2024/25 tax year, down from 62 percent the previous year. This decline is largely due to smaller firms not serving ultra high net worth clients, resulting in them contributing very little relative AUM.

The FCA's report indicates that the drive to control more of the market is expected to continue. Over 40 percent of wealth firms plan to acquire another firm, grow revenue, or increase their client base by more than 25 percent in the next two years. However, nearly 20 percent of firms are considering winding down or selling parts of their client base due to the effects of a concentrated sector.

The watchdog cautioned that firms should not consolidate too rapidly, as it may lead to poor client service, business continuity issues, and potentially disorderly failures. The FCA emphasized that as firms grow, governance, oversight, and controls must keep pace to ensure consistent client outcomes.