A weekly update on issues important to the Investment Management industry
As firms sort through the “leftovers” of 2025, several themes are poised to carry meaningful weight into 2026. Margin discipline, improved client engagement, and rising operational maturity have strengthened the industry’s foundation. Strategic dealmaking, evolving succession plans, and measured progress with AI adoption continue to shape valuations and competitive dynamics. These lingering trends aren’t remnants—they’re the building blocks of a resilient, opportunity-rich year ahead for RIAs.
Earnouts can bridge valuation gaps in RIA M&A by tying part of the purchase price to post-close performance. This article explains the differences between retention and growth earnouts, key metric choices, and structural considerations that help create clear, predictable, and effective earnout frameworks for both buyers and sellers.
Investment management firms generate more earnings than they need. The real challenge isn’t making money—it’s deciding, intentionally and strategically, how best to use it.
This week we’re flipping the script on last week’s post, “What to Look for in a Buyer for Your RIA,” to analyze transactions from the buy-side perspective. This post focuses on the key attributes that RIA acquirers should look for in a target that should make the transaction successful, value-accretive, and enduring.
Key Takeaways The right buyer offers more than the highest price.Successful RIA transactions balance financial terms with strategic alignment and cultural fit. Understanding a buyer’s motivations—and how they plan to integrate your firm—is essential to preserving client relationships, employee engagement, … Continued
Schwab’s announcement that they’re halving client referrals to RIAs through the SAN program threatens an industry that was already struggling with organic growth. Dependable, sustainable growth requires building a marketing strategy that isn’t dependent on outside factors like ambitious custodians, and a tracking system to know how that marketing strategy is performing. Keeping an eye on your metrics will help keep you on the road to lasting value.
RIA M&A activity rebounded sharply in 2025, with record deal volume in the first half of the year. Through September, 209 transactions were completed—up from 156 in 2024—driven by private equity involvement, lower borrowing costs, and ongoing consolidation trends. While total transacted AUM declined, serial acquirers and aggregators continued to dominate deal flow. For RIAs, shifting rate dynamics, valuation trends, and evolving buyer profiles highlight the importance of strategic planning—whether pursuing growth, transitioning ownership, or exploring a sale.
After several years of industry-leading performance, alternative asset managers have begun to lose momentum in 2025. Despite strong fundamentals, these firms have underperformed broader markets amid higher-for-longer interest rates and shifting investor preferences toward liquidity. While short-term valuations have softened, the long-term case for alternatives remains intact, supported by their structural advantages and ability to navigate volatility.
RIAs delivered mixed results in Q3 2025, with larger asset managers leading the sector at an 11% quarterly gain, outpacing the S&P 500’s 8% return. Smaller managers rose modestly, while alternative managers continued to lag after a stretch of strong growth in 2023 and early 2024. On a year-over-year basis, traditional managers remained ahead of the index, while alternative managers posted the strongest revenue and EBITDA growth despite muted price performance. We explore further in our Q3 2025 Market Update.
Clear communication is essential in family business governance, yet shared definitions are often overlooked. That’s why the UHNW Institute’s new Wealthesaurus caught our attention. This online glossary brings clarity to the complex vocabulary of family wealth and enterprise conversations. This resource also provides standardized definitions of common and specialized family wealth advising industry terms. For directors, it’s a valuable reference that supports informed decision-making and effective dialogue across generations.
Private equity continues to reshape the RIA landscape in 2025, fueling record deal activity and driving consolidation at an unprecedented pace. With 132 transactions in the first half of the year totaling $182.7 billion in AUM, PE-backed firms now account for more than half of all acquirers. Their disciplined “buy-and-build” strategies, focus on scalability, and willingness to pay strategic premiums are redefining ownership dynamics and valuations across the sector. For RIA owners, aligning with PE’s playbook offers both opportunities and challenges in unlocking long-term enterprise value.
Independent trust companies are in short supply compared to the thousands of RIAs, yet demand for their capabilities is rising. For wealth managers, acquiring trust services enhances client retention, attracts larger and more complex relationships, and secures multigenerational ties. This supply–demand imbalance suggests trust companies may carry a real “scarcity value” in today’s market.
In the late spring of 2015, Brooks Hamner and I were having lunch and started talking about creating a blog to explore what we were seeing regarding valuation and advisory projects in the RIA space. The big question was not whether we could start it, but whether we could keep it going.
Most blogs start strong for a few months and then kind of fade out. When we got back from lunch, I pulled up a Word doc and Brooks and I started brainstorming topics. In a few minutes, we had several dozen ideas, so it was pretty clear we had enough to say.
Ten years later, we still haven’t run out of ideas.
Looking back, though, we do see a few themes on heavy rotation. I doubt that will change.
Independent trust companies are gaining momentum in 2025, offering high-net-worth clients flexible, client-focused solutions outside the constraints of traditional banks. As the $68 trillion Great Wealth Transfer accelerates, these firms stand out for their personalized services, regulatory agility, and tech-driven client experience—positioning them as key players in the evolving wealth management landscape.
In the investment management world, evaluating a firm’s margin isn’t as simple as “more is better.” For RIAs, margin reflects efficiency, but it also reflects the firm’s tradeoffs with compensation. Investment management is a talent business, and striking the right balance between margin and employee compensation that allows the firm to attract, retain, and incentivize talent is critical to an RIA’s success. Read more in this week’s post.
In the ever-evolving wealth management sector, we see RIAs exploring ways to bolster their competitive edge, long-term sustainability, margin, and valuation. An increasingly common strategy involves integrating family office services, which extend core asset management to include comprehensive tax optimization, estate planning, philanthropy coordination, and lifestyle management. This often manifests as a multi-family office (MFO) model, serving multiple ultra-high-net-worth (UHNW) clients under RIA regulatory frameworks. In this week’s post, we discuss the strategy and if it can provide resilience for RIA margins.
AI is expected to have a significant impact on the RIA industry. This relatively new technology is already reshaping how RIAs manage assets, engage with clients, and navigate an increasingly competitive landscape. For RIA owners, understanding and leveraging AI is becoming critical to maintaining a competitive edge, enhancing firm valuations, and ensuring long-term success in a mature but evolving industry. This post explores the multifaceted impact of AI on the RIA industry while providing actionable insights for firms looking to adapt.
With a constant stream of headlines about M&A and near-daily inquiries from prospective acquirers, it’s easy for RIA owners to get the impression that external transactions are the norm. Internal transactions don’t generate headlines, and prospective buyers (next-gen management) likely aren’t beating your door down to close a deal. While they may be less conspicuous, internal transactions are a viable avenue for succession planning and one that many RIAs accomplish successfully.
Matt Crow recently had the pleasure of joining Aaron Hasler, Managing Partner at Skyview, and Catherine Williams, head of practice management at Dimensional Fund Advisors, for a discussion about the financial strategies involved in succession planning. They covered financing options, common roadblocks, generational dynamics, and much more. Listen to their discussion in our latest post.
M&A activity in the RIA space rebounded strongly in early 2025, with record-setting deal volume in Q1 and continued momentum into Q2. A favorable interest rate environment, increased private equity involvement, and a growing number of serial acquirers helped fuel activity. Despite a sharp decline in total transacted AUM, deal count and strategic interest remained high. For firms exploring growth, succession, or liquidity, understanding the evolving M&A landscape—and aligning your strategy with the right partner—has never been more critical.
One of the most frequently overlooked sectors in the wealth management industry may be its first cousin, the independent trust industry. While many still associate trust administration with banks, which account for more than 75% of the space, the growing prominence of independent trust companies is capturing the attention of many participants in the investment management community. In this post, we examine current trends impacting independent trust companies.
RIAs generally outperformed the S&P in Q2 2025, with smaller asset managers returning over 13%, and alternative asset managers facing another quarter of underperformance after a year of strong growth. Year-over-year, alternative investment managers saw the strongest AUM growth, while traditional managers proved better at converting this growth to earnings. We explore further in our Q2 2025 Market Update.
Over the next two decades, an estimated $68 trillion is expected to transfer from Baby Boomers and Gen X to Millennials and Gen Z in what has been dubbed the “Great Wealth Transfer.” For RIAs and trust companies, this transition presents both opportunities and challenges that directly impact firm valuations. As client demographics evolve, investment management firms must adapt to retain AUM and navigate the valuation implications of this seismic wealth shift.
A frequent question among RIA owners is whether internal buyers, such as employees or partners, pay less for their equity stakes compared to external buyers, and if so, why pursue internal succession? The answer is straightforward: internal buyers typically pay less, sometimes significantly less, due to unique industry dynamics and the structure of internal deals. This post explores the valuation perspectives and practical reasons behind this pricing differential, as well as why internal succession remains a compelling strategy despite lower valuations.
