Registered investment advisor (RIA) consolidators have grown considerably over the last decade and now account for $1.5 trillion in assets under management (AUM), according to The Cerulli Report—U.S. RIA Marketplace 2024. This market opportunity has shifted the dynamics for strategic partners, asset managers, and, most notably, RIAs themselves.

In 2018, just 6% of advisors in the RIA channels were affiliated with a consolidator, and by 2023, advisor headcount grew to 14%, an 8-percentage-point increase. This development is only mildly outpaced by asset marketshare growth, which reached 18%, jumping by 10 percentage points. RIA consolidators have been able to maximize this growth period by building platforms that cater to advisors’ needs while driving the goals of a larger, integrated organization forward.

Cerulli’s research shows technology has become a core component of RIA consolidator offerings to potential advisors and practices they plan to acquire. According to the findings, 55% of advisors say an integrated technology platform is among the most-valued services offered by a consolidator.

“Fundamental to RIAs’ needs, technology tools have become a costly and complex component of advisory practices,” says Stephen Caruso, associate director. “Many consolidators have successfully constructed centralized technology platforms that give advisors access to a best-of-breed technology stack where internal technology teams manage the tools. By plugging their advisors into a single system of record, firms can seek better efficiencies in integration and a greater overall picture of their business,” he adds.

Succession planning (50%) is also a highly valued service. According to Cerulli, 37% of the RIA channels’ advisors will be retiring over the next decade, putting 35% of channel assets in motion. RIA buyers have made significant inroads into this market, positioning themselves as a buttress to advisor practices and RIAs that understand they need an exit strategy but have been unable—or not prepared enough—to execute one independently. Across RIAs, almost three-quarters (74%) consider succession planning or exit strategies as a factor influencing their decision to join a large RIA platform or aggregator.

“As this wave of consolidation rolls across the industry, advisors will be increasingly confronted by opportunities to sell their business or affiliate with a with a large RIA acquirer,” says Caruso. “RIA acquirers looking to differentiate themselves can do so by building a stronger framework of opportunity around the advisor,” concludes Caruso.