1 in 5 Wealth, Asset Firms Will Be Acquired by 2029

Don’t think of it as selling out, but rather as buying in.

Over the next half of the decade, there are expected to be 1,500 M&A deals involving asset and wealth managers, according to a new report from consultancy Oliver Wyman and Morgan Stanley. That means one in five firms existing today will be acquired by 2029. In the past, the wealth and asset management industries were highly fragmented, and firms could find success with small teams and just a handful of clients. But the landscape is changing. 

“In 2024, the industry saw record AUM transacted, bolstered by high-profile mergers and thriving mid-market consolidation activity,” analysts said in the report. “These dynamics are already at play.”

Dealer’s Choice

The issue is that mid-sized firms are being squeezed by shrinking profit margins and rising technology costs. Meanwhile, many new clients are going toward already large, profitable firms that have the funds to improve their tech stacks and hire new talent. Clients are consolidating, too, choosing firms that can do all their financial planning and portfolio management under one roof.

And deal numbers aren’t slowing down. In fact, they’re twice as high as they were a decade ago, the report found. Since 2022, more than 200 deals a year has become the new normal:

• By the end of this year, analysts project a total of 266 transactions. By 2029, that number could be closer to 350.
• Most deals today are within the same sector — asset managers acquiring asset managers, and wealth managers acquiring wealth managers — the report found.

Raw Deal. While consolidation has led to greater valuations for wealth managers, deals aren’t always a success. Less than 40% of asset managers transactions improved cost-income ratio three years after the deal, and many saw clients pulling money out or growth lagging behind the market, the report found.