Major regulatory changes took effect in the financial services industry at the end of October. Now, mortgage advisers will need to be regulated by the Financial Services Authority (FSA) and general insurance brokers will fall within the FSA's regulatory regime from 14 January next year.

Operators of quoted independent financial advisers (IFAs) believe they could benefit from these changes. David Hickey, executive chairman of AIM-quoted IFA network Lighthouse, points out that companies such as his can offer smaller outfits an umbrella under which they can carry out their activities.

'We provide the regulatory framework, which cuts out the onerous costs involved. It also cuts out the time it takes to meet compliance rules, allowing advisers more time to meet with their clients,' explains Hickey, whose company has recently turned cashflow positive.

This is a major landmark as the IFA sector has struggled to make their businesses work in the public setting. The regulatory changes, as well as the implementation of the FSA's proposals on polarisation (changing the notion of independence from product providers), should spur further consolidation in this space.

Millfield acquired Inter-Alliance over the summer for £11.35 million, creating a company with over £100 million annualised turnover. Another outfit looking to take part in this process is fully-listed Berkeley Berry Birch, which has interests in an IFA network, its own financial advice business and an insurance division. The company is close to break even as well.