Data and culture ‘critical enablers’ for driving consolidation activity – NextWealth

Data and culture, underpinned by rigorous governance and controls, are now “critical enablers of scale” for driving value for consolidators, a new report by NextWealth has stated.

The group’s Consolidation of Advice Report 2026 revealed that cultural alignment is consistently being cited as a cause of failed acquisitions, while poor data quality is stopping deals getting off the ground.

NextWealth’s report identified four distinct operating models shaping acquisition strategies – provider-backed, private equity (PE) scale-led, PE optimisation-led and high-net-worth (HNW) focused – highlighting the lack of a single route to scale.

The report examined merger and acquisition (M&A) activity in the UK financial advice market from Q1 2021 to Q1 2026, drawing on interviews with acquiring firms and PE investors.

NextWealth said its key takeaway is that data, underpinned by the right culture and strong governance, is needed to validate and achieve scale, which ultimately drive value – no matter the consolidator’s operating model.

While these factors have always mattered, NextWealth suggested acquirers now apply a systematised process to ensure good outcomes for advisers and clients as the FCA continues to scrutinise consolidation.

“We examined the acquisition, technology, and investment proposition strategies currently employed by 30 leading acquirers,” NextWealth consulting director, Emma Napier, commented.

“What we found was that the era of buying advice firms simply for scale is well and truly over. Today's acquirers must prove they can integrate, govern, and grow their businesses organically to survive the next phase of consolidation.”

Napier added that the first wave of PE investment during the early 2020s, which pushed firms to scale as fast as possible, has been replaced by more considered approaches.

“In 2026, firms measure success against the value created, which has been executed against the business plan,” she added.

“Meanwhile, the importance of data hygiene and management cannot be overstated. We found that many acquirers screen target firms on the quality of data well before even making an offer. Notably, some firms go so far as to start to integrate data before deals are signed.

“The momentum is still there, it’s just that acquirers are more deliberate than they once were, they’re clearer about the model they are building and the role acquisitions play within it.

“The market is no longer defined simply by how many deals happen, but by who is doing them. A small number of firms account for a large share of acquisitions, but new entrants from adjacent market sectors are broadening the buyer pool, and that means more exit routes for sellers.”

---