Originally published on MoneyMarketing
8th December 2025
https://www.moneymarketing.co.uk/opinion/roderic-rennison-cutting-through-the-consolidator-connotation/
There is, unfortunately, an increasing tendency to use the word consolidator as a catch-all term to describe all acquirers. To make matters worse, the term has taken on an increasingly negative connotation.
The implication, at least in some quarters, is that a “consolidator” is a rapacious buyer whose main interest is simply to secure additional assets, with limited concern for clients, advisers and employees in the business being acquired, or for the needs and wishes of the seller.
I therefore suggest that a better word to use is “acquirer” — but it is important to recognise that there are several distinct types, each with different objectives.
The purpose of this article is to outline these differences and highlight the features to consider, along with potential questions to ask, so sellers can better assess which type of acquirer might be suitable for their requirements before entering into more detailed discussions.
As I have suggested in previous articles, having a professional adviser working alongside you is likely to lead to better outcomes, as they will (or should) know the right questions to ask.
1. Buyer, consolidator, aggregator or investor?
The starting point, I suggest, is to understand exactly who is looking to acquire a financial planning business. Emails frequently land in intermediary firm owners’ inboxes, and it may not be immediately obvious what type of entity is making the approach.
Both consolidators and aggregators acquire multiple smaller businesses, but their post-acquisition strategies differ significantly. A consolidator typically acquires companies and aims to fully integrate them into a single, cohesive entity with unified technology, brand and operations to achieve maximum efficiency and cost savings.
An aggregator, by contrast, acquires businesses for scale or geographic expansion but allows them to largely maintain their independent operations, brand and systems under a central umbrella.
An investor is an individual or entity that provides capital with the expectation of a financial return. Investors — often private equity firms or wealthy individuals — may back aggregators or consolidators, but do not always take an active role in day-to-day operations or in the mechanics of combining businesses. Their primary concern is the return on investment (ROI).
To summarise:
2. Cultural alignment
Most financial planning firms have a culture that reflects the values and views of their owners. These may evolve over time, but in most cases not radically. An early assessment of an acquirer’s culture — and any points of difference — should therefore be an important part of early dialogue.
This includes how they deal with clients and how they treat staff. Are they only interested in clients of a certain size or type, or do they aim to serve a broad range of clients? Do they offer different investment propositions, or is there a focus on one area, such as active management? Do they start from the assumption of retaining all advisers and staff, or are they seeking to “cherry pick”?
Focused questions will elicit the answers the seller needs in order to reach informed conclusions.
3. The structure of the acquisition
Most financial planning firm sales involve selling all equity or all clients, but several alternatives should be considered early in the process. For example:
Does the seller want part of the consideration paid in shares of the acquirer’s business, to participate in potential future growth?
Is a partial sale more attractive than a full sale?
Does the seller want to sell only a minority stake initially, and if so, what is the desired timescale to sell the remaining equity?
If an asset sale is being contemplated, does the seller want to retain some clients for a period?
The answers to these and other questions will help identify which acquirers and propositions are likely to be of interest.
Not all acquirers are consolidators, and not all buyers are the same — even though many may appear similar at first glance. Understanding who is in the market and what their objectives and propositions are is a key success factor for sellers. Securing external input is likely to lead to better outcomes.
Roderic Rennison is a founding partner of Catalyst Partners