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Practice numbers fall as firms continue to consolidate: report

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20 April 2026 by Alex Driscoll, ifa

Article link: https://www.ifa.com.au/practice-numbers-fall-as-firms-continue-to-consolidate-report/

Advice practice numbers continued to fall across the final quarter of 2025, pushed partly by the flurry of merger and acquisition activity across the sector, with larger firms consolidating their position.

According to Adviser Ratings’ Musical Chairs Report for Q4, the total number of practices declined 123 quarter-on-quarter (5,934 to 5,811). This means by 31 December, there were 266 fewer practices than at the beginning of 2025.  

While it might be easy to attribute this to the ever-falling numbers of advisers and the mounting costs of running a business, the report suggested a different hypothesis.  

“This accelerating contraction, even as adviser headcount had briefly recovered in Q3, confirms the ongoing consolidation dynamic: adviser capacity is increasingly concentrated within larger, better-resourced firms.” 

The report added: “The M&A activity that began accelerating through 2025 continued at pace in Q4, as firms pursed scale, succession, solutions, and operational efficiencies ahead of the education deadline.” 

“ARdata continued to record elevated demand from M&A participants and strategic acquirers seeking granular practice-level intelligence to support due diligence and valuation analysis.”  

This trend as also been noted by others within the industry, such as Forte Asset Solutions principal Steve Prendeville, highlighting that many advisers looking to get their practices into the M&A market are not looking to retire, rather they are looking to secure succession.   

“A sale doesn’t mean the end of an adviser’s career anymore. What we’re seeing is a lot of principals saying they’ve taken the business as far as they can, but they still love being an adviser and want to keep working,” he told the ifa Show podcast.   

“Around 60 per cent of the transactions we’re involved in are advisers who don’t want to leave the profession — they’re looking to de-risk, secure succession and continue advising clients for another three, five or even ten years.”  

Prendeville stated that this pattern is being fuelled by the fact that a lot of advisers are looking to scale and remain competitive but are unwilling to or do not have the necessary resources to put towards such an undertaking.   

“For many principals, the decision to sell is about saying: I want this business to go to the next level, but I don’t want my family’s balance sheet carrying all the risk.”  

He added: “Maintenance of the status quo might feel safe, but in valuation terms a business that isn’t growing in a growth market is effectively a business in decline.” 

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