In a seller’s market, however, what’s proving to be even more consequential is the buyer’s ability to demonstrate it has state-of-the-art AI that can differentiate them and attract choosy sellers who want to partner with acquirers who have the most growth potential.

“An acquirer who is up to speed on AI is solid gold”
“Aquirers don’t care what the technology of the seller looks like,” said veteran dealmaker Rush Benton, who now heads the transaction consulting firm Gorman Jones. “They’re going to put the acquired firm on their own tech stack and platform anyway. But an acquirer who can demonstrate they’re up to speed on AI and have the best platform as a result is solid gold. They become much more attractive as a buyer.”

Not coincidentally, several of the industry’s largest firms, and acquirers, have recently announced massive AI investments and build outs. LPL Financial has invested nearly $2 billion in “LPL Latitude,” which will embed agentic AI into advisor workflows, Mariner is spending $35 million on a five-year partnership with Humanity Labs that will add 700 bots to an AI platform and Savant Wealth Management is spending $50 million on a new operating system that will add 1,000 “bionic agents” to its workforce.  

“AI implementation that allows you to do more with less people will make your business more valuable”
Sellers that are embedding agentic AI into their workflows are also benefiting by “commanding a stronger valuation multiple than less tech-forward peers,” said Harris Baltch, co-head of investment banking for Dynasty Financial Partners. 

It’s possible that innovative sellers may have AI systems that fill a void buyers don’t have yet, but the primary benefit for sellers is being able to improve efficiency and margins, as well as data quality and automating workflows, according to Baltch.

While having advanced AI implementation as a seller doesn’t directly enhance value, “it can certainly indirectly enhance value,” according to David Goldstone, manager of investment research at Condor Capital Wealth Management.

“If a firm’s AI implementation is allowing you to do more with less people and time you are going to have superior margins which will make your business more valuable,” Goldstone said. “If AI is improving client outcomes and freeing up advisor time to better serve clients, than your firm is likely performing well, winning referrals, and growing faster.”

And if the acquirer also has a strong AI implementation, employees who are already accustomed to using AI tools may be easier to integrate, Goldstone added.

“Sellers are beginning to ask about buyer’s AI directly”
M&A consultant Allen Darby, CEO of Alaris Acquisitions, said he’s “never had a seller go to market based on an AI-centric model. Creating such an environment would take tens of millions of dollars over many years, and RIA firms under $10 billion are simply not putting money toward that goal at this time. They don't even know how to think about it. Therefore, today the AI premium is purely theoretical for sellers.”

However, AI is making a big difference for acquiring firms, according to Darby. 

“I’m already seeing it,” he said. “In the areas which sellers consider when selecting a buyer, AI is becoming a major factor. Sellers are beginning to ask about AI directly. Buyers who excel are those with actual AI integration that has generated tangible returns on investment or scale within their organizations. These buyers are spending tens of millions of dollars and it’s now differentiating them in the eyes of growth-minded sellers.”

A buyer that can demonstrate superior AI capability has “a differentiating advantage” when wooing sellers who are looking to join a firm with the greatest growth potential, agreed investment banker John Langston, CEO of Republic Capital Group.

“The buyer's platform matters more than the seller's”
For most deals, the buyer's platform matters more than the seller's, because RIA consolidators are increasingly acquiring smaller firms specifically to integrate them into a shared operating infrastructure, replacing whatever proprietary AI the seller already has, noted Dynasty’s Baltch.

That supports the “seller's market differentiation” logic, he said. “If a buyer can credibly say “join us and every advisor gets AI-augmented research, drafting and portfolio tools on day one,” that's a tangible, forward-looking growth story for a principal deciding where to land,” Baltch said.

Accordingly, AI capability is driving the growth narrative and integration efficiency story, increasingly decisive in a seller's market, while seller AI maturity mainly drives current profitability and de-risking in the deal itself. 

“Both matter,” Baltch said, “but for different reasons and at different points in the negotiation.”