RIA Deals Rebounded in Back Half of 2023: Echelon

Wealth management mergers and acquisitions activity continued strong in 2023, with 321 transactions announced, just below the record 340 transactions in 2022, Echelon Partners reported Tuesday.

Economic uncertainties and risk-off sentiments across markets weighed on deal volume in the first half of the year, leading to a below-historical-average 140 transactions. However, the wealth management sector’s strong fundamentals sparked a revival in deal activity during the second half, with 181 transactions.

The deals that Echelon Partners tracks and identifies include any transaction involving an RIA with more than $100 million in assets under management, which have also been reported by a recent data source. In addition, the report includes financial advisors who terminate relationships with other financial service institutions in order to join RIAs, with the identified breakaway advisors transitioning $100 million or more in assets to a new financial services firm.

Changing Industry Dynamics

Last year’s minority investment activity remained above historic levels, with 35 announced deals, one more than in 2022. Average assets per seller surged by 94.3% year over year (excluding deals over $20 billion in assets) to $4.8 billion, slightly below 2021’s record $5.1 billion. 

Echelon Partners attributed this increase in average assets to large RIAs receiving multiple minority investments from private equity firms.