Despite high interest rates and global economic challenges slowing M&A activity in other financial sectors, wealth management remains appealing. This stability is attributed to the scalable and steady cash flow models of wealth management firms, which make them attractive for private equity sponsorship and succession planning. 

 The wealth management industry reached a historic high in M&A activity during 2024, with 366 deals announced, a 14% increase from 2023 and surpassing the prior record of 340 deals in 2022, driven by favorable macroeconomic conditions and a surge in private equity involvement, according to a report from RIA investment bank Echelon Partners.  

Private equity firms dominated activity, with 50 direct investments in 2024, a 66.7% year-over-year surge from 2023, “sowing the seeds for further M&A and tuck-in acquisitions,” the report read.  

Wealth management firms are taking varied approaches in the current environment: some aggressively pursue strategic expansions and opportunistic add-ons, while others focus on integrating recent acquisitions and improving operational efficiencies amid less favorable financing conditions. 

Total private equity-backed deals, including direct investments and tuck-in acquisitions by portfolio companies, reached 259 transactions, up from 199 in 2023, signaling its growing influence in the wealth management space. Private equity firms acquired or invested in firms totaling more than $8.2 trillion in managed assets in 2024.   

Major investments included Bain Capital’s acquisition of Envestnet, with $6 trillion in managed assets. Among other notable transactions in 2024, were private equity firm TPG’s minority investment in Creative Planning and Neuberger Berman’s minority investment in Mariner Wealth Advisors.  

“After two years of declining direct investment activity, activity is ramping up due to growth investments and minority recapitalizations involving large RIA platforms,” according to the report. Following direct investments, Echelon estimates private equity will support an additional 3-4x the initial capital for tuck-in acquisitions and growth funding.  

Private equity investors are increasingly targeting platform-caliber assets that are profitable (typically greater than $5 million EBITDA), growth (ideally 10% or more organic growth), experienced management teams and a deep bench of advisor talent.  

The 2024 wealth management M&A landscape continued its dynamic growth with 14 new buyers entering the marketplace, a 10% increase from 2023. Echelon expects valuations to rise as more buyers typically drive demand and valuations for attractive RIA firms, especially those with strong financial performance and growth potential. Furthermore, to secure deals, buyers are increasingly offering creative transaction terms and solutions, catering to sellers’ unique needs and preferences.  

In 2024, Wealth Enhancement Group emerged as a leading acquirer in the wealth management sector, completing 18 deals, making it one of the most active firms in the industry. This continues a trend of strong performance, as WEG has consistently ranked among the top five acquirers by deal volume over the past three years.  

MAI Capital Management debuted on the list of top acquirers in the wealth management M&A space, announcing 10 deals and adding a total of $5.7 billion in assets, including two transactions exceeding $1 billion each. Similarly, Waverly Advisors and Allworth Financial also reported 10 acquisitions each, with Waverly adding $5.7 billion in assets and Allworth contributing $4.9 billion to their respective platforms.  

Despite consolidation efforts, the RIA market remains highly fragmented. Since 2019, the total number of RIAs has grown by 18%, underscoring the significant opportunity for further consolidation.  

“2024 saw 14 new buyers enter the marketplace, an uptick of 10% relative to the number of new entrants in 2023,’ read the report. ‘With a larger quantity of buyers competing in the marketplace, we are likely to see a rise in valuation and further flexibility in deal structure and solutions.”