Fidelity Sees Jump in Quantity, Value of RIA M&A Deals Since 2020

During the last three years, 492 transactions took place, compared to 146 during a similar period from 2017 through 2019.


The last three years have seen a significant increase in the quantity and asset value of registered investment adviser M&A deals, with the median AUM of acquired firms increasing from $250 million to $400 million, according to a recent study from Fidelity Investments.

Fidelity’s 2023 M&A Valuation & Deal Structure Survey compared the 39-month period from January 2020 through March 2023 with a 31-month period from January 2017 through July 2019 and found that the more recent period had 492 reported transactions, up from 146 for the earlier period.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The study surveyed serial acquirers involved in nearly 500 deals over the last three years. They accounted for virtually 75% of all RIA transactions during that time.

Aggregators buying RIAs include OneDigital’s recent acquisition of $3.8B retirement and wealth shop StoneStreet Equity. The deal is the fourth retirement and wealth acquisition of the year for OneDigital. Workplace retirement plan advisers are part of the RIA binge: OneDigital, Hub, Captrust and NFP all recently brought on an RIA.

“Despite market headwinds, the wealth management industry continues to be a vibrant space for M&A, with the environment rewarding high-quality firms with strong multiples,” Laura Delaney, Fidelity’s vice president of practice management and consulting, said in a statement. “Although activity has increased substantially vs. the previous study period, it’s important for RIA business owners to align on valuation drivers and understand the dynamics involved in the motivations and expectations of buyers and sellers.”

Deals have been closed at a faster pace, with an average deal completion time of roughly seven months, down from nine months during the 2017 to 2019 period.

Buyers reported walking away from roughly half (52%) of evaluated deals. Respondents cited as key factors the misalignment of: valuation expectations (87%), culture (73%) and vision (50%).

“The nature of deals will continue to evolve,” said Delaney. “We’re seeing strategic acquirers become increasingly efficient which is reflected in reported deal completion time; however, opportunity can be left on the table due to misalignment of dealmaking fundamentals. There’s an element of emotion behind every transaction.”

Fidelity’s study was conducted from February 13 through March 28 and covered M&A deals from January 2020 through March 2023. Its 2019 study covered M&A deals between January 2017 through July 2019. Four center of influence firms and 26 RIAs participated in the survey.

«