The UK financial advisory market continues to evolve through the profound transformation brought about by the ongoing growth of consolidation.

Once a peripheral trend, consideration of current and future business value has become the dominant force shaping owner-managed financial advisory firms. Private equity-backed consolidators, national networks, and regional acquirers are actively seeking to acquire high-quality IFA firms. For advisers considering a sale, whether in the short or medium term, the question is no longer if they should prepare for acquisition, but how they can maximise their value in a competitive and increasingly sophisticated M&A landscape. 

While traditional valuation metrics such as annual recurring revenue (ARR) and EBITDA remain central to deal structuring, there is growing recognition that certain intangible factors can significantly enhance a firm’s attractiveness and command a premium. Among these, the strategic use of tax planning products, particularly the Enterprise Investment Scheme (EIS) and Business Relief (BR), is emerging as a key differentiator. 

A confluence of factors is driving the consolidation of the IFA sector; ageing adviser demographics, increasing regulatory burdens, Consumer Duty obligations, and the need for scale and operational efficiency. According to a 2024 industry report, over 60% of UK advisers are expected to retire or exit the profession within the next decade. This generational shift is creating fertile ground for acquirers seeking to build national footprints and leverage economies of scale. 

Valuation multiples vary widely, but firms with strong compliance, robust client retention, and high-quality advisers are consistently achieving premiums. However, as the market matures, acquirers are becoming more discerning. They are no longer simply buying books of business, they are investing in future-proofed, strategically aligned firms that can thrive within a larger entity. 

Tax planning products such as EIS and BR have potentially been previously overlooked in valuation discussions because they do not typically generate high levels of recurring revenue. EIS investments, for example, can be episodic and may not contribute to ARR in the same way as platform-based assets or ongoing advisory fees. However, their strategic value lies elsewhere. The value premium can be attributed to the demonstration of the client bank's quality, the sophistication of the advice, and the long-term planning ethos they represent. 

Advisers who regularly recommend EIS and BR solutions typically work with clients who have complex financial needs, namely high-net-worth individuals, business owners, and those with significant estate planning considerations. These clients are not simply seeking investment returns; they are looking for holistic, tax-efficient strategies that align with their long-term goals. 

Consider the case of a 58-year-old entrepreneur who has recently sold a business and is facing a substantial capital gains tax liability. An adviser who can structure an EIS portfolio to defer or mitigate that liability, while also providing exposure to high-growth UK companies, is delivering far more than investment advice. They are solving a real-world problem with a government-backed solution. This type of client, who has been fundamentally assisted through a major life milestone, is likely to remain engaged, refer others, and value the adviser’s expertise, all of which enhance the firm’s long-term value. 

In addition, tax planning strategies often originate from referrals by accountants, solicitors, and other professional intermediaries. These relationships are a powerful indicator of an adviser’s standing within the professional community. They also demonstrate the ability to handle complex cases and collaborate across disciplines; skill sets that are highly prized by potential acquirers. 

For example, an adviser who regularly receives referrals from an accountancy firm to assist with inheritance tax mitigation using BR-qualifying portfolios is operating at a level that goes beyond transactional advice. They are part of a trusted network, and their firm benefits from a steady stream of high-value introductions. This embeddedness in the professional ecosystem adds a layer of resilience and growth potential that acquirers find compelling, as they seek companies that can attract new business while also retaining existing client banks. 

EIS and BR are inherently long-term strategies. EIS investments typically require a minimum three-year holding period to qualify for tax reliefs and may need significantly longer to realise their ambitious high-growth returns, while BR requires a two-year ownership period to be effective for inheritance tax mitigation. These time horizons foster deeper client relationships and increase retention. 

Take the example of a retired couple with a £2 million estate, concerned about passing wealth efficiently to their children. Their adviser recommends a BR-qualifying investment strategy that aligns with their risk tolerance and estate planning goals, as well as reflecting upcoming changes to legislation. Over the next five years, the adviser continues to manage the portfolio, adjust allocations, and provide ongoing guidance. This continuity builds trust and loyalty, and from a consolidator’s perspective, it represents “stickiness” that translates into predictable revenue and reduced attrition risk. Advisers in this scenario should also be embedding themselves in the client and intergenerational decision-making as they review wills to ensure appropriate inheritance of BR-qualifying assets. 

Of course, not all advisers are equipped to deliver tax planning strategies. Those who do are often among the most qualified and experienced in the profession. They understand the nuances of HMRC rules, the risks and rewards of tax-efficient investments, and the importance of suitability and the highest standard of regulatory standards. 

This expertise is a key asset in the acquisition process. Consolidators are increasingly seeking firms with advisers who can contribute to the group’s intellectual capital, support complex client needs, and mentor others. A firm with a strong tax planning proposition is not just selling a book; it is offering talent, credibility, and leadership potential. 

As alluded to previously, the UK tax landscape is becoming ever more challenging. With frozen allowances, reduced dividend and CGT thresholds, and ongoing inheritance tax reform, clients are actively seeking ways to preserve wealth and reduce liabilities. Advisers who can offer robust tax planning, including EIS and BR, are not just meeting current demand; they are positioning their firms for long-term relevance. 

 Imagine a scenario where a consolidator acquires two firms: one with a traditional investment focus and another with a strong tax planning capability. As tax rates rise and client needs evolve, the latter firm is better equipped to retain clients, attract new ones, and adapt its proposition. This adaptability is a form of future-proofing, and it adds strategic value that goes beyond the numbers. 

Post-acquisition integration and potential team career progression should also be considered. Advisers who bring tax planning expertise into a consolidated firm often find themselves well-positioned for leadership roles. Their skills are in demand, and their ability to contribute to the broader proposition enhances their career trajectory and influence within the new structure. 

For instance, a senior adviser with deep knowledge of EIS and BR may be asked to lead a specialist tax planning division within the group, train other advisers, or support marketing and client education initiatives. This creates a virtuous cycle of the adviser growing professionally, the acquiring firm enhancing its proposition, and clients benefiting from deeper expertise. 

The extension of EIS until at least 2035 provides long-term certainty, while Business Relief was emphasised as a cornerstone of inheritance tax planning with the introduction of a personal allowance from 6 April 2026. These schemes are not loopholes; they are policy tools designed by the Treasury to encourage investment in UK businesses and support intergenerational wealth transfer. 

For advisers, this means that EIS and BR are not fringe products; they are central to a modern, future-ready proposition. They offer clients meaningful tax benefits, support economic growth, and align with broader financial planning goals. For owner-managed advisory firms considering a sale, the message is clear: start positioning your business to maximise. This means integrating tax planning into your core proposition, documenting client outcomes, building relationships with professional referrers, and ensuring compliance with Consumer Duty obligations.  

Consideration should also be given to highlighting adviser qualifications, showcasing client retention metrics, and demonstrating the strategic use of government-backed schemes. These elements may not show up in ARR calculations, but they influence deal structure, earn-outs, and post-acquisition integration. 

In a consolidating market, not all firms are created equal. Those who demonstrate depth, trust, and strategic foresight will command a premium. Tax planning products like EIS and BR are powerful tools in this equation. They showcase adviser quality, client loyalty, and long-term thinking, all of which are essential in today’s M&A landscape. 

Andrew Aldridge is Partner & Chief Operating Officer at Deepbridge Capital