RIAS are Worth More Than Ever

RIAs are worth money — like, a lot of money.

Last year, the RIA industry not only saw a record volume of deals with 239 transactions, but median valuation multiples on earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased to a record of 11x, up from 9.9x in 2023 and a new high going back nearly a decade, according to Advisor Growth Strategies. What do all those integers and variables that look straight out of high school algebra class mean? Sellers can get an even prettier penny when they offload their firms than just a year ago. With 2025 shaping up to be another high activity year for M&A, those valuations could go up even further.

“Overall, things are really good for sellers,” said Brandon Kawal, partner at Advisor Growth Strategies, adding that the Phoenix-based consulting firm was surprised to see more than 40 buyers complete multiple deals in 2024. 

Solve for X

After a tepid 2023 that lacked some of the larger deals seen today, the RIA industry has become a seller’s market thanks to private equity’s growing presence in the wealth management space and older firm owners cashing in and retiring. M&A activity is so high that some 96% of RIAs who responded to Advisors Growth Strategies’ survey said they get at least two calls a month about potential deals:

• In 2024, the median deal size was $536 million.
• Since the start of the decade, the median valuation multiple has increased 35%, up from 8x in 2020.

Exception to the Rule. Despite deal volumes and valuations growing, the arrow doesn’t point up for all sellers, Kawal said. “We expect buyers will continue to lean in on the best opportunities but take a measured approach to those average opportunities,” he said, adding that driving a solid premium requires plenty of organic growth, a portable client experience, and an incentivized next-gen team.