That shift shows up in what firms have actually rebuilt. More than two-thirds improved their client data and over half reviewed segmentation within the first year alone. By now, over half have reviewed their investment proposition or record-keeping, around half have changed their business structure, and two in five have reworked fee structures. One adviser summed it up bluntly: Consumer Duty caused them to examine everything they do, how they do it, and why.

The consolidation test

This is where Consumer Duty and consolidation meet. Our Consolidation of Advice Report 2026 finds that acquiring purely for scale no longer works: data quality and culture now drive a deal’s value. Acquirers screen targets on their data before making an offer, and firms being bought are asking sharper questions of buyers in return. Due diligence increasingly runs in both directions.

Data quality can be tested before a deal completes. Consumer Duty is the test that runs afterwards, in whether clients and advisers actually stay put once two businesses merge. Cultural alignment is the hardest of the three to systemise, and it remains among the most common reasons acquisitions fail. That is the question we are asked more than almost any other: how do you carry a culture, a data model and a team through an acquisition without losing the client-outcome focus Consumer Duty demands?

Fees, value and who gets served

Back in 2023, firms braced themselves for Consumer Duty to simply push prices up. Three years on, that fear was only half right. The average ongoing advice fee has risen to 83bps, and almost a quarter of firms raised fees in the past year, yet overall client costs have held broadly stable. At the same time, the share of firms rating their own advice as good or excellent value has climbed from 76% to 91%. Fees have risen, but so has the value clients say they are getting for them. The same value lens is now shaping how firms approach AI our research finds firms expect it to lift the value they deliver, not to cut their fees.

The other side of that coin is who firms can afford to serve. Some have raised fees and become firmer about turning away clients they cannot serve profitably at a fair price. Others have kept fees steady but been more transparent about service levels instead. A number have gone further still, reviewing client segmentation and introducing a stricter disengagement process for clients they can no longer serve well. That is uncomfortable for advice gap concerns, but it is an honest one.

Three years in, Consumer Duty has not settled quietly into the background. It has forced advice firms to look harder at how they work, who they work for, and who is best placed to acquire them next. For firms treating it as a genuine rebuild of data, culture and people rather than a compliance milestone, that scrutiny is increasingly the thing separating the businesses built to last from the rest.

Emma Napier, Consulting Director, NextWealth

FAQS:

What is Consumer Duty and why does it matter for advice firms?

Consumer Duty is the FCA’s outcomes-based regulation, introduced in 2023, requiring firms to prove they deliver fair value and good outcomes for clients. Three years on, our FABB research shows it is the single biggest driver of change in advice business models, with 45% of firms naming it as such in 2025.

Has Consumer Duty pushed up financial advice fees?

Partly. The average ongoing advice fee has risen to 83bps, with 23% of firms raising fees in the past year. But overall client costs have held broadly stable, and the share rating their advice as good or excellent value has climbed from 76% to 91%.

How has Consumer Duty changed which clients advice firms serve?

Many firms have reviewed client segmentation and service levels, with some running a stricter disengagement process for clients they can no longer serve profitably at a fair standard. This has sharpened advice gap concerns but forced greater honesty about who firms can serve well.

Why does Consumer Duty matter for advice firm consolidation?

Data quality and culture, both reshaped by Consumer Duty, now drive acquisition value. Acquirers screen targets on data quality before making offers, and cultural alignment, the hardest thing to systemise, is among the most common reasons acquisitions fail.

What has changed operationally since Consumer Duty was introduced?

Over half of firms have reviewed their investment proposition (55%) or record-keeping (53%), 51% changed their business structure, and 41% reworked fee structures, a rebuild that has touched nearly every part of the operating model.