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Private Equity Carves Out Its Place in the RIA Space

June 14, 2023

Backed by some of the industry’s biggest PE players, M&A among RIA consolidators is strong.

The impact of mergers and acquisitions (M&A) in the registered investment advisor (RIA) channels has rippled across the financial advice industry. What was once a cottage industry has exploded into a compelling business opportunity. A highly scalable, fragmented market with a growing service sector and a recurring revenue model, the RIA channels are attracting the attention of private equity (PE) giants that typically dominate sectors like industrials, technology, and healthcare.

In this white paper, Cerulli examines why PE firms have placed increased attention on the RIA space and how they have already helped supercharge some of the industry’s acquirer mainstays.

Key Highlights

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The $3.7 Trillion Opportunity

Cerulli estimates the opportunity for RIA acquisitions is at $3.7 trillion across advisor retirements, new breakaway advisors, and growth-challenged RIAs. There is no shortage of potential acquisition targets.

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A Perfect Storm of Growth Drivers

High growth rates, market fragmentation, and recurring revenue streams make the RIA marketplace particularly attractive to PE firms looking to fund deals in the wealth management industry.

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The Next Generation of RIA Consolidators

As consolidation runs through the RIA channel, a growing subset of emerging consolidators is maturing. This next generation of consolidators is accessing growth capital much earlier and actively engaging with private equity firms to support their ongoing acquisitions. 

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