There is currently a group of around 100 undervalued and underperforming UK adviser firms "ripe for the picking" by acquisitive competitors, a study suggests.
Research on 1,000 UK IFAs, conducted by Plimsoll Publishing, picked out 95 separate businesses that may have had "a long and distinguished history", but are currently suffering.
It concludes these "wounded animal" firms represent "one of the biggest opportunities in a generation" for companies looking to consolidate in the current climate.
"What we have identified here is a group of wounded animals," Plimsoll senior analyst David Pattison says. "Many of these businesses have a long and distinguished history, yet their recent performance has deteriorated.
"By definition these are classic acquisitions. Anyone looking to grow their own company through acquisition should be looking for businesses that are currently undervalued yet, with help, can be turned around."
Plimsoll says it identified these businesses based on a combined scoring system, incorporating overall financial strength, ownership, valuation and future potential.
It adds it has also identified around 650 companies that may be ready and able to snap up the 95 in trouble.
"The current market conditions have presented an unprecedented set of opportunities to buy into a business that even a year ago would have been unaffordable," Pattison says.
Despite this, Plimsoll says acquiring "ripe" businesses will not be easy. "Many will need rapid and deep cost cutting to get them back on a firm financial footing," it concludes. "We could see as many as 3,000 jobs go over the next 12 to 24 months as these companies shrink to ensure their survival."IFAonline
First mentioned in Cridland Report
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