Transactions for registered investment advisors are on the rise, plenty of new buyers are crowding the market, and RIA owners keep getting older and eyeing an exit, which indicates the persistent pace of RIA mergers and acquisitions should keep on rolling.
It’s been an incredible decade for RIA M&A, with the emergence of buyers making repeated acquisitions, often backed by streams of private equity money.
And that's despite recent headwinds such as high interest rates and pricey valuations.
The RIA industry has evolved significantly in the last decade, according to Fidelity Investments, a leading custodian for RIAs.
According to a new study by Fidelity Investments, the number of RIA M&A deals grew from 89 in 2015 to 233 in 2024 for a 10-year compounded annualized-growth-rate of 14 percent.
Over the same time, purchased assets increased from $130 billion to $669.8 billion, and the median deal size increased from $500 million to $536 million.
According Fidelity’s tally, 46 RIA buyers completed deals in 2015 compared with 78 acquirers in 2024.
And the buyers are not standing still, according to one Fidelity executive.
“The private equity funds used to buy and be in cruise control,” said Laura Delaney, vice president, business consulting, Fidelity Investments. “That’s changed. Now, they are much more active in putting a strategy together for the growth of the RIA.”
“Also, deals for RIAs with at least $1 billion in client assets are on the rise,” Delaney said. “As recently as 2022, those kinds of sellers were less apt to come to market.”
“Add to that, October 2024 was the strongest month ever recorded for RIA M&A,” she said.
Two factors drove the surge in deals in October, Delaney said. First, private equity managers are working with strategic acquirers to set growth goals at the beginning of the year. Deals, on average, take seven to nine months to finalize.
As such, firms may be targeting deals in the first quarter of as part of their agenda, and finalizing them towards the end of the year, Delaney said.
Add speculation of changes to tax treatment for unrealized capital gains arose during November’s election. The uncertainty may have driven some firm sellers to finalize deals in 2024, Delaney said.
Meanwhile, the bevy of strategic acquirers – and familiar names – continued to lead the M&A marketplace last year, according to Fidelity.
Top dealmakers included Focus Financial and its consolidating affiliates, with 21 transactions, Wealth Enhancement Group, with 12, and Waverly Advisors, at 10, according to Fidelity.
Leading RIA dealmakers in 2024 also included MAI Capital Management with 10, and Mercer and Allworth Financial with nine each.
Serial acquirers such as Hightower and its affiliates, Dakota Wealth, Mariner, Creative Planning, CAPTRUST, and Savant Wealth reported fewer M&A deals in 2024 compared with 2023.
Fidelity noted that it bases its tally on press releases from firms, which means that there may be activity taking place with strategic acquirers that is not captured in its report.
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