At a time when certain wealth management deals are counted in tens of billions of dollars in AuM, the report gives more detail on the momentum, nature of deals, and continued involvement of private equity.

M&A transactions involving RIAs rose in the third quarter of 2024 from the previous three months and have held steady versus where they were a year ago, defying economic volatility and a sign of consolidation momentum, figures show.

DeVoe & Company, the US strategic consulting firm, reported that there were 65 transactions in Q3 2024; data shows that M&A activity is tracking slightly ahead of 2023 year-to-date. The first three quarters of 2024 saw 191 transactions, up from 185 transactions during the same period last year. 

The industry remains on pace to surpass 240 transactions this year and achieve its fourth consecutive year of elevated activity, DeVoe & Co said.

The figures did not include this week’s acquisition by Pathstone of $45 billion Hall Capital Partners, adding to 14 acquisitions in 14 years by that firm. (See analysis here by US correspondent Charles Paikert.) One notable element – also analyzed here – has been the involvement of private equity.

“Private equity continues to fuel consolidation among large and mega firms in 2024. As more buyers cross the $50 billion and $100 billion thresholds, the appetite to acquire $5 billion-plus RIAs will increase. And as the large firms get bigger, their value propositions get stronger,” the firm said. “As a result, the RIA landscape will become more competitive. The convergence of these trends should yield mega-buyers seeking larger transactions to materially ‘move the needle'.”

“The RIA M&A market has seen robust growth for over a decade, with the number of transactions increasing almost every year since 2013. While there are no indications the trend will reverse, it has slowed. After jumping by more than 50 per cent in 2021, transaction volume has remained in the 240 to 265 range for the last three years,” DeVoe & Co said. “Large consolidators have long dominated deal flow, but more RIAs, regardless of size, are increasingly seeing M&A activity as a strategic avenue for accelerating growth and addressing a variety of strategic objectives.”

Larger sale sizes
In 2024, the average sellers managed about $1 billion in assets, rebounding from dips to $827 million and $819 million in the prior two years. An increase in sellers with over $500 million in assets under management has been a primary driver of the recovery. So far in 2024, sellers between $500 million and $5 billion in AuM represented 48 per cent of transactions, up from 43 per cent in 2023.

Source: DeVoe & Co

Mega-sellers ($5 million-plus in AuM) have held steady in 2024, accomplishing two more deals in the first nine months of the year than in 2023. This cohort has remained consistently between 10 per cent and 14 per cent over the last several years, except for a “blip” in 2022 when mega-sellers represented only 6 per cent of transactions, DeVoe said.