FCA brings Buy Now Pay Later under its regulation from July 2026
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12/02/26
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Consolidation: Balancing commercial ambition with regulatory discipline
The multi-firm review of consolidation in the financial advice and wealth management sector has been closely watched by firms – and with good reason. As consolidation continues at pace, the FCA has turned its attention to how acquiring firms govern, integrate and oversee their growing groups.
In a recent Q&A with experts session, TCC Group’s Chief Product and Commercial Officer, Garry Evans, and Technical Director, David Boyhan, unpacked the review’s findings and explored their practical implications for consolidators. The headline message? While scrutiny is increasing, the overall outlook for the sector remains positive.
Watch the recording here.
No new rules but higher expectations for consolidators
One of the most important takeaways from the FCA’s review is that there are no new regulatory requirements. Instead, the regulator is reinforcing long-standing expectations, placing a much stronger emphasis on a firm’s ability to demonstrate control, oversight and governance across acquired businesses.
The FCA has been clear. Consolidators must demonstrate that they understand exactly what they are buying, that they have appropriate systems and controls in place as they scale and that group-wide risk management frameworks genuinely consider all entities within the group.
Encouragingly, the regulator also highlighted significant good practice across the market and confirmed its commitment to supporting consolidators in delivering strong customer outcomes and sustainable growth in wealth management.
A supportive environment for consolidation
Despite increased scrutiny, the broader environment remains highly favourable for acquirers.
Government and regulatory initiatives aim to increase the UK participation in investment markets, supported by measures including targeted support, simplified advice, and the UK retail investment campaign. At the same time, structural trends – including the shift towards drawdown in retirement – continue to drive demand for ongoing financial advice.
From a risk perspective, historically significant redress liabilities, particularly for defined benefit (DB) transfers, have materially declined as interest rates have risen. Taken together, these factors paint a strong picture for continued consolidation within wealth management.
Where the FCA wants to see improvement
Alongside positive observations, the FCA identified several areas where firms must raise their game:
- Group risk management: ensuring all entities are properly captured within risk frameworks
- Scaling systems and controls: aligning infrastructure with growth
- Board effectiveness: maintaining appropriate skills, experience and challenge as organisations expand
- Due diligence: moving beyond a tick-box approach to truly understanding advice quality, culture and potential liabilities.
These themes run consistently throughout the FCA’s review and point to a clear regulatory expectation: growth must be matched by robust governance and operational maturity.
Choosing the right firms to acquire
From TCC’s perspective, a successful acquisition strategy starts with clarity and documentation. Consolidators should be explicit about their risk appetite, the types of firms they wish to acquire, and the strategic rationale behind each transaction.
Cultural alignment is a critical yet often underestimated factor. Even technically strong firms can struggle post-acquisition if values, behaviours and operating models do not align. Similarly, particular care should be taken where target firms have a history of higher-risk investment activity.
High-quality regulatory due diligence remains essential. Firms should not only be identifying issues but also fully understanding their implications and acting decisively on any findings.
Governance, controls and integration
The FCA placed strong emphasis on centralised governance frameworks and the ability to evidence compliance across acquired firms.
Boards and committees must evolve as groups grow, whether through training existing members or recruiting individuals with specialist expertise who can provide effective challenge. On the operational side, consolidators must decide whether firms will be fully integrated into a central control environment or retain elements of their existing arrangements – but in all cases, sufficient compliance resources, systems and controls are non-negotiable.
Integration itself remains one of the biggest challenges in consolidation. The most successful programmes start well before completion, with clear plans for onboarding, technology migration, training and resourcing. Poorly resourced integration can undermine even the most strategically sound acquisition.
Technology also plays an increasingly important role, particularly in evidencing compliance across distributed adviser populations. Centralised investment in systems rather than fragmented local decisions supports consistency, insight and regulatory confidence.
Looking ahead: Helping you grow while reducing risks and costs
The FCA has not moved the goalposts, but it has made its expectations unmistakably clear. Consolidators must be able to evidence oversight, demonstrate robust governance and show that acquisitions are supported by strong integration and control frameworks. For firms prepared to meet these standards, the opportunity remains compelling.
TCC has supported consolidators for over 20 years across acquisition, due diligence, integration, governance and remediation. Combined with Recordsure’s AI-enabled compliance technology, we help firms build scalable, regulator-ready consolidation models, whether through advisory support, outsourced services, or end-to-end solutions.
To get a better understanding of how the FCA’s findings apply to your business, and how we can help you manage regulatory and operational risks throughout consolidation, book a time with our consolidation specialists.
Watch the recording here.
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