As boutique firms look to maintain their upward trajectory amidst a volatile market, forming relationships with like-minded individuals provides ample opportunity for scale
Despite evolving market conditions in 2025, wealth management mergers and acquisitions are poised to experience a dramatic uptick in popularity. Spurred by an influx of private equity and favorable regulatory shifts, the competitive landscape presents ample opportunities for RIA firms to scale, diversify offerings, and, most importantly, form strategic partnerships.
The world of M&A is constantly evolving, and the days when operating with a solely organic growth mindset can set a firm ahead are gone. Strategic alliances are the largest differentiator and remain a relatively untapped area for smaller RIA firms, but they are the fastest way to grow to scale. As such, partnerships provide the necessary agility for success within the industry. As the M&A space enters this new era, establishing strong relationships will cultivate the next chapter of one’s business and form the stepping stone of a new trajectory where firms of like-minded individuals can grow together.
The pressing frustration that smaller, independent boutiques face comes from the pitfalls of maintaining a growing business. Many of these firms have maintained an operation that sufficiently addresses their current client base. Still, with a growing book, many advisors are challenged with sustaining a key balance of serving clients whilst navigating administrative duties with tighter resources.
The premise of M&A is an exciting idea to many, but older advisors may be reluctant to pull back the reins on their current method of operations. We’ve found that advisors most willing to form strategic partnerships are between 45 and 60 years old, but with the average age of an investor veering 60 plus, in their minds, a transition may seem as if it comes as a form of kowtowing to a larger business.
Additionally, M&A provides ample capital to ground the successes of a business. DeVoe reported that only 20% of advisors are confident that the next generation can afford to buy their business, with others feeling that younger advisors are unequipped to do so. However, transitions provide the capital and opportunity for serviceable scale while comping older advisors into the future and, in return, growing their businesses at a rate previously unseen. Mergers provide an expansion of resources, including HR, dedicated marketing, tech stacks and more that advisors can lean on and pass along to maintain a thriving business.
The movement of RIAs and independence will always be a prominent standing factor. However, this independence cannot be achieved without support. M&A presents the infrastructure to supply safety nets for smaller firms through compliance and investment management, among other services business owners need to continue harvesting the fruits of their labor. In addition, a key differentiator with M&A is access to technology. The basis of the RIA industry has always been rooted in face-to-face connectivity. Moving forward, partnering with a larger firm no longer bounds a business to the confines of a physical parameter. Connectivity is key, and technology provides the segway into breaking out of previous geographical restrictions and expanding one’s global spectrum.
M&A in wealth management is still in its early stages. While larger wirehouses have historically been at the forefront of this driving force, there is no better time for boutiques to seize this unique opportunity. In facilitating a seamless transition for all, advisors must seek connections championing their best interests, particularly without the expense of firm culture. Cultural fit is paramount when one considers selling a business, not only in terms of how the current culture can be carried forward but also in terms of being elevated and integrated so that all partners can grow successfully into the future.
To some, the lack of M&A education can be viewed as an opportunity to buy up practices for less money, but this can lead to the detriment of the industry over time. With smaller firms being unaware of their potential value, fewer people will be willing to take steps to factor in succession planning as a means of preservation for their businesses to thrive and for the next generation of advisors on the horizon. Private equity is still all in, but these smaller investments are projected to be creeping into the foreground – providing ample upside potential for those seeking further growth.
Increased education will better contextualize and prepare advisors to sell their practice, putting them in a better position to facilitate a transition and ensure the next generation’s prosperity. Firms must harness their strengths and connect with like-minded individuals to amplify the resources partnerships bring to secure their legacies. In building the future of this industry, strategic partnerships can fuel growth previously unseen for businesses operating at a smaller scale. With that, when executed properly, M&A creates a domino effect of success and enhances the ability for scale, retention, and value for advisors and clients.
