RIA gold rush fever is over: Report
Mergers and acquisitions of registered investment advisors continued at a strong, if not spectacular pace, in 2023, with RIA buyers and sellers contending with a turbulent stock market at the start of the year and the increased cost of deal-making as a result of rising interest rates, according to an annual survey by Advisor Growth Strategies, an M&A advisory and management consulting firm.
Advisor Growth Strategies tracked 41 closed transaction in 2023 compared to 48 a year earlier, a decline of almost 15%.
But more important than that, the RIA dealmaking market has turned, according to the report.
Independent broker-dealers, including LPL Financial, Commonwealth and Raymond James, have become significant buyers of RIAs as they focus on gathering assets and preventing financial advisors from bolting to the competition.
Focus Financial Partners, a leading buyer of RIAs and one of the first significant aggregators, went private and is in the midst of an internal overhaul and reorganization, and Corient, CI Financial’s US RIA business, was recapitalized through a massive infusion, delaying a potential initial public offering.
Meanwhile, Goldman Sachs’ 2019 acquisition of United Capital Financial Advisors turned out to be a bust, with Goldman selling the remains of United Capital to Creative Planning, a giant RIA. This transaction calls “into question the possibility of a large strategic [buyer] stepping in to provide ultimate liquidity, for now,” according to the report.
“The early days in the gold rush of the RIA space are in the past, but the competition for new territory is just beginning,” according to the report, which is titled Life After the Gold Rush.
The shift in the RIA M&A landscape examined in the Advisor
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