He is also predicting “the start of a real convergence of the consolidators” within 2024.
Moving the clock back 12 years to when Fairstone started partnering with growing firms, there were only six players in the market.
Today, that number is 46.
“Strength and depth of financial backing, matched with economies of scale and a proven track record, are critical aspects when it comes to investing in acquisitions on an ongoing basis,” he said.
“I fully expect to see a good number of smaller operators combine together as a way of achieving critical mass and higher levels of profitability.”
If carefully thought through, Hartley said some of these mergers may work very well.
Others, however, could result in quite a degree of fall-out.
He explained that in a few years' time, the number of operators in the sector could be down to six again and if that were the case, then IFA business owners might be able to look forward to less repeated cold calls asking if they want to sell their firm.
Banking on the Budget?
Meanwhile, close to home, there is also a long-stop date of January 2025 for the next election in the UK but this could well play out within 2024, he explained.
“Right now, I can only envisage a Labour leader as the next resident of Number 10 but probably not with a sufficient majority to avoid a hung parliament.
“Given how much ground the Conservative Party have to make up I would expect a few hail mary tax proposals in the spring budget as a last-ditch attempt to swing the polls.
“Personally, I won’t be banking on anything in the budget as I suspect a quick reversal will be on the cards if we ultimately have a change in government a few months later. Still, it’ll be nice whilst it lasts.”
sonia.rach@ft.com
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