The wealth management industry has been an unlikely beneficiary of the pandemic. Investment Managers, Financial Planners, and Private Bankers have been busier than ever. After the initial panic of falling markets, clients were well coached by their wealth management professionals to stay invested, and indeed by all accounts clients were eager to invest more. The future looks bright for Investment Managers, Financial Planners, and Private Bankers, and the continued M&A activity in the sector is an endorsement of this future.

M&A activity will time and time again reinforce the value in owning a wealth management business. An ever increasing pot of money will continue to chase an ever diminishing number of firms (until we get to the deconsolidation phase, but that’s another article) and valuations will just keep on rising. Great if you’re a retiring IFA who owns a book. More widely in the industry, though, only small number will reap the benefits of this M&A activity. There will of course be some short term incentives, like lock-ins, but for the vast majority in the sector they rely on their salary and bonus. A defined bonus if you’re lucky and a discretionary bonus at many firms. Actually, we think there’s nothing wrong with the latter. The employers in the sector provide great working environments, career opportunities, and great salaries. Most importantly, the power of their brand delivers clients. Clients go to the well-established brand and are loyal to this and the “burden” of hunting for new clients is removed. Many of these firms do actually provide excellent training on how to find clients and for those early in their career this too can be invaluable experience.