While the influx of private equity money into the North American wealth management sector is a well known one, there's more than one way to inject capital into the sector and manage growth. We look at a range of perspectives in this feature.

There are many ways to buy into the wealth management story and the multi-trillion-dollar wealth transfer under way. The most significant route appears to be the torrent of private equity money entering the space.

It is no wonder why private equity funds like wealth management, which is riding a wave of a multi-trillion dollar intergenerational wealth transfer. The sector is seen as generating relatively sticky revenues – although the disruptive power of AI on some business models might be a cause for caution. Global private equity dry powder – uncommitted capital available for new investments – stood at $2.184 trillion as of March 31. 2025, down 5.2 per cent from its highest year-end total on record of $2.305 trillion in December 2023, according to an S&P Global Market Intelligence analysis of the latest available Preqin data, published December last year.

Private equity is, in fact, the dominant M&A model, but it is a mixed blessing, depending on whom you ask. While some PE deals may turn out fine for advisors, and just as importantly, their clients, it comes with conditions. For example, a PE firm typically has a time horizon of around five to seven years, with a hoped-for exit. 

Aly Kassim-Lakha, CEO of Aspen Standard Wealth, has a different approach. Aspen is a business that has grown to about $15 billion in AuM through acquiring a raft of RIAs since its launch in 2024. 

“We are partners in perpetuity,” Kassim-Lakha told Family Wealth Report in a call. “The relationship is one where success is not about quarters [results] but lifetimes and generations. I had felt there was a service model worth upholding. There are too many cases of a business being sold every three to five years.”

In March, Aspen, based in New York City, acquired BlueSky Wealth Advisors, a North Carolina-based RIA with $1 billion in AuM. Other recent deals include MG Financial, SKY Investment Group, New England Private Wealth Advisors, Martel Wealth Advisors, DHK Financial Advisors, and Summitry. Aspen has so far acquired 10 firms – more deals are in the offing in coming weeks, Kassim-Lakha said.

Under its revenue model, Aspen buys back the equity of those who want to sell their business; Aspen will keep majority ownership and control. 

While the Aspen approach might gain traction, the “barbarians” of private equity appear to be as hungry as ever. 

In January this year, AdvizorPro, a business tracking ownership and timelines in the wealth sector, said that advisors thinking of moving to a new firm must understand which of their potential new businesses are backed by private equity and potentially near an ownership change.

According to ECHELON Partners, a US investment bank and valuation firm catering to the wealth sector, during the third quarter of 2025, private equity firms were involved, either directly or as a sponsor of a strategic acquirer, in about 72.8 per cent of all year-to-date deals. The percentage of strategic acquirer deals involving a PE-backed buyer reached 75.4 per cent in the quarter.

A debate that continues is whether such owners, who typically want to achieve a profitable exit five years after the initial stake, have the patience for remaining involved in a professional services business designed for long-term client relationships spanning decades. 

On the flipside, it might be argued that infusing capital to support growth is as important as regulatory and technology demands rise amidst a multi-trillion transfer of wealth. All that AI innovation costs money. Another consideration is that if private equity money does not appeal, the listed ownership route also has challenges, imposing short-term shareholder pressures on firms to deliver. Focus Financial went private in 2023. As we have reported about AITi Global, being listed is not straightforward. Being publicly traded is not a guarantee of success, and carries its own distractions. 

Another theme – highlighted by recent travails in the private credit space – is that high multiples paid for firms might not look so great if borrowing costs are elevated.

Minority stakes
One variation on a theme is the minority stake approach. Emigrant Partners, for example, has taken such stakes. The minority stake means that the founders don’t lose control, or at least get used to external involvement at a pace that suits. Another example is the case of Procyon, an RIA in which Constellation Capital took a minority position in April 2025. The financial stake size wasn't disclosed.

Phil Fiore, co-founder and chief executive of Procyon, heads a business that boasts 16 owners, 64 staffers and more than 1,200 clients.

"There comes a point in every business that looks to scale when you need to institutionalize your cap table and financing source. That’s exactly what we did in bringing in our partner CWC into our cap table. We can now structure much larger transactions than we could previously, and we have more credibility in the marketplace knowing we have a substantial backer behind us," Fiore told FWR in a call.

With some PE deals said to be reaching purchase price multiples of the mid-20s when set against expected earnings, some industry figures say the integrated “buy it and absorb it” approach squeezes out the variety from the sector and ultimately to the detriment of clients, even if the incentive for sellers to take the money is clear. 

Whether driven by PE money or not, the “integration model” of acquisition – absorbing acquired businesses fully into an existing structure – isn’t one that appeals to Nate Lenz, co-founder and CEO at Concurrent. 

“Full integration is not always in the best interests of the client,” he told FWR. “You have seen a lot of innovators in the space homogenize into the integrated model.”

"Average multiples for full sale transactions are well documented in industry valuation studies and M&A reports. Many of the industry's highest reported multiples are tied to control transactions, where advisors are giving up ownership and decision-making authority. We think it's important to look at the value of the shares you're keeping, as well as the shares you're selling," he said. "We invest through minority partnerships in our model, allowing advisors to access liquidity while retaining control of their business, preserving their culture, and continuing to participate in future growth. Because we're purchasing a minority interest rather than control, the headline multiple isn't always a direct comparison to a traditional acquisition."

Wake up integrated
A problem is that many advisors at firms may hope to become partners and owners when their elder colleagues retire. Instead, under an integration model, “they go to bed on Friday as an heir apparent and wake up on Monday as an employee,” Lenz said.

The pricing model for Concurrent is a revenue override, such as 10 per cent of the advisor fees plus a fee for using its tech stack, he said.

“There are some great legitimate reasons for the integration model,” Lenz continued. With the rise of AI, and the costs of deploying technology that clients come to expect, some firms think they need the capital infusion and scale to shoulder the burden.

“What can become problematic is when valuations become disconnected from realizable value. A private equity investor may make an investment at one multiple and later mark it at a significantly higher valuation, but if that value cannot ultimately be realized through a transaction, the mark becomes more theoretical than economic. In the long run, realized outcomes matter more than reported valuations," he added.

Consolidation 
One meta-theme that has been around for decades is the expectation of industry consolidation. Kassim-Lakha said he expects it to roll on.

“It is still a very fragmented industry. If I am an investor, I am looking for a place to invest money in an area that is not facing existential risk related to AI. AI has now changed how investors think of what a safe haven is. With wealth management, a lot of it is tied to human relationships. If anything, I see momentum increasing.”

Kassim-Lakha agreed that while financial advisors were willing to explain the virtues of business transfer and succession to their clients, they can be less effective at applying these lessons to their own business lives.

AI fuels the trend
There’s little doubt that AI adoption fuels some of the need for fresh capital. 

Procyon’s Fiore is positive on AI and its impact. “The purpose of AI from my perspective is to give our team members the one thing that we can’t create more of and that is time. If we can give our team members tools that make them more efficient and therefore save time on completing certain tasks for clients, that `extra’ time can be used to further service our clients.

“Something as simple as having an AI notetaker can make a big impact. We're implementing technology that helps with meeting preparation, takes notes during client meetings, updates our CRM, and ultimately assigns the follow-up work that comes out of those conversations. That's a huge lift for our team,” he said. 

Achieving the kind of scale that external capital can help provide also matters for firms seeking to attract and retain talent. Advisors want the latest tools if they’re to achieve results. 

“We want our talent to perform at the highest levels. In order for them to do that, they need to have proper tools to execute at the speed and quality that they need to. As a firm, our role is to anticipate these needs, equipping our talent with the tools and support them to succeed,” Fiore said. 

The dream of larger scale begs the question of what the limits might be. Again, this suggests that there may be limits to how much more PE funds will spend.

Fiore is not interested in scale for its own sake.

“I only want us to be the “best” for the markets we serve. I think of a time when I was growing up in the business where there were the `big’ wirehouses like Merrill, Smith Barney, Morgan Stanley, but you also had these incredible boutique wealth managers such as DLJ, Wheat First, Bear Stearns – just to name a few. The culture in those boutique firms was undeniable and highly respected on Wall Street. As we scale, our blueprint draws inspiration from that unique, agile boutique model rather than a standard, large-scale corporate framework,” he said.  

Fiore put some numbers on his ambitions. “By the end of 2029 I would like our RIA to be managing $45-50 billion for clients and organizations throughout the country and producing over $100 million in gross revenues. I expect we'll have approximately 100 financial advisors and another 200 team members supporting our clients nationwide,” he concluded. 

For the moment at least, it looks as if the weight of private equity money isn't going to decline any time soon. 

(If you wish to comment on this story, email the editor at tom.burroughes@wealthbriefing.com)