Key Takeaways

1. Today’s RIA M&A market remains strong, but cycles are inevitable. Elevated deal volume and valuations persist despite broader economic uncertainty, yet history shows these conditions won’t last forever.
2. Preparation during favorable conditions creates optionality. Firms that invest early in diligence readiness, financial clarity, and strategic alignment are better positioned when markets cool or opportunities accelerate.
3. Market pauses often lead to renewed deal surges. Periods of uncertainty tend to release pent-up demand, rewarding firms that are prepared to move quickly rather than waiting for “perfect” conditions.

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Much of the country was recently reminded how devastating winter storms can be, especially for those who are not prepared or used to them. The cold front swept across the U.S. last weekend, disrupting travel, freezing infrastructure in places unaccustomed to icy conditions, and forcing businesses to adapt quickly. While the weather forecast grabbed headlines, the RIA M&A market has been telling a very different story.

As we highlighted in last week’s RIA M&A Update: Q4 2025, deal activity remains historically strong, with transaction volume and valuations reflecting a market that is anything but frozen. The contrast is striking: frigid temperatures outside, and a market environment inside the RIA space that continues to generate heat.

Seasonal metaphors can oversimplify complex markets, but they can also be useful. The recent cold snap offers a timely lens through which to think about where we are in the RIA M&A cycle and how firms should be preparing for what comes next.

Winter Weather vs. Market Climate

Extreme weather events tend to expose preparation gaps. Regions that rarely see snow (like all of our offices) struggle with icy roads. Power grids designed for mild winters face unexpected strain. The lesson is not that cold weather is unusual — it’s that resilience matters most when conditions deviate from the norm.

The same holds true in RIA M&A. Today’s “hot” market conditions are well documented: sustained buyer demand, a deep pool of private capital, demographic tailwinds from aging advisors, and ongoing industry fragmentation. These factors have kept deal flow elevated even amid broader economic uncertainty.

But markets, like seasons, are cyclical. The question is not whether conditions will eventually change, but whether firms are preparing while conditions remain favorable.

Cold Snaps and Market Corrections

A sudden cold snap doesn’t signal the end of winter — it is winter asserting itself. In markets, periods of slower activity or valuation compression are often viewed as anomalies rather than natural phases of a cycle.

In RIA M&A, we have not yet experienced a meaningful “freeze.” Even as interest rates normalized and public markets fluctuated over the past few years, deal volume remained resilient. Buyers adjusted structures, not appetites. Earnouts, minority investments, and creative financing stepped in where leverage pulled back.

This resilience can create a false sense of permanence. Just as homeowners may underestimate the risk of a once-in-a-decade storm, advisory firm owners may assume today’s deal terms will always be available.

History suggests otherwise. M&A cycles cool. Capital reallocates. Buyer priorities shift. The firms that fare best during those transitions are rarely the ones scrambling to react; rather, they are the ones that prepared when conditions were still favorable.

Thawing Periods and Deal Acceleration

In many parts of the country, winter storms are followed by rapid thaws. Pent-up demand — delayed travel, postponed projects, deferred decisions — is released all at once.

We see similar dynamics in RIA M&A. Periods of uncertainty often lead to short pauses in deal execution, followed by bursts of activity once clarity returns. Advisors who delayed succession conversations, recapitalizations, or strategic reviews often re-engage simultaneously, intensifying competition among sellers and buyers alike.

This is one reason M&A markets can feel “hot” even after periods of macro stress. The underlying drivers — succession needs, growth ambitions, and the desire for scale — don’t disappear. They accumulate.

Firms that have already clarified their objectives, cleaned up financial reporting, and assessed strategic fit are better positioned to move quickly when opportunities arise. Those that wait for perfect conditions may find themselves competing in a crowded field.

Winter Prep: Due Diligence as Risk Management

One of the clearest lessons from extreme weather is the value of preparation. Insulated pipes, backup generators, and emergency plans don’t make headlines — until they aren’t there.

In the context of RIA M&A, preparation takes the form of diligence readiness. This includes:

• Clear, normalized financial statements
• Thoughtful documentation of client demographics and revenue sustainability
• Realistic assessments of owner involvement and post-transaction roles
• Alignment among partners on goals and timelines

Too often, these issues are addressed only after a letter of intent is signed. In a competitive market, that can introduce unnecessary risk. Buyers have options, and surprises during diligence can quickly cool enthusiasm.

Preparing in advance does not obligate a firm to transact. Instead, it provides optionality and the ability to engage from a position of strength when opportunities present themselves.

Market Seasons Are Inevitable — Outcomes Are Not

No firm controls the market cycle, just as no one controls the weather. What firms can control is how exposed they are to unfavorable conditions.

Advisors nearing retirement who delay succession planning risk being forced into decisions during less favorable markets. Growth-oriented firms that wait too long to assess capital needs may miss windows where partnership terms are most attractive.

Conversely, firms that treat today’s market like winter prep season by using favorable conditions to strengthen positioning are better equipped to navigate whatever comes next.

A Final Thought

The recent cold front will pass, as it always does. So, too, will today’s unusually robust RIA M&A environment eventually evolve into something different. The firms that emerge strongest will not be those trying to predict the exact timing of change, but those using the present moment wisely.

In M&A, as in winter, preparation doesn’t prevent storms, but it does make them far easier to weather.

About Mercer Capital

We are a valuation firm that is organized according to industry specialization.  Our Investment Management Team provides valuation, transaction, and consulting services to a client base consisting of RIAs, asset managers, and trust companies.