M&A Hit Record Highs in 2024
There were 272 transactions last year, and that breakneck pace isn’t expected to slow down anytime soon.
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Last year wasn’t just good for M&A activity in the RIA space — it was the best.
The industry experienced unprecedented levels of dealmaking, topping 272 transactions in total, according to DeVoe & Company. That included a high of 81 deals in the fourth quarter and a monthly record of 39 in October. The record highs were due in large part to post-election market gains and high valuations that had owners more open to selling, as well as declining interest rates in the fourth quarter, and the on-going need for succession planning. That breakneck pace for M&A activity isn’t expected to slow down as we settle into 2025.
“These factors collectively set the stage for a historic year and strong momentum heading into 2025,” CEO David DeVoe told The Daily Upside.
Kind of a Big Deal
Not only were there tons of handshakes in 2024, the industry landed some of the largest deals to date. For example, Mubadala Capital, an Abu Dhabi state-owned investment firm, took CI Financial private in a deal in November that valued the Canadian asset manager and serial RIA buyer at $8.6 billion. Less than a month into the new year, the industry is already seeing similar deals going down, paving the way for a strong 2025:
- Mariner struck a deal to acquire Cardinal Investment Advisors, adding $292 billion in assets under advisement and about 40 employees to its practice.
- RIA and financial planning firm Integrated Partners partnered with RetirementDNA, expanding its West Coast footprint and gaining an advisory team with more than $1 billion in AUM.
- Nearly half of all advisors are interested in acquiring other wealth management practices, according to a recent Cerulli survey.
DeVoe said M&A activity could grow in 2025, supported by the continued appeal of scale, high valuations, and attractive deal structures.
Is This Even Organic? But, there’s a key problem just below the surface of these multi-million, and even billion-dollar, deals: organic growth. Expansion through internal operations has plummeted from 9% in 2017 to less than 3% in 2023. Many firms have simply deprioritized investments in growth initiatives, according to DeVoe. That is not a recipe for success.
DeVoe said that failing to grow organically is a major missed opportunity for advisory firms, and cited data that showed a 1% increase in organic growth leads to a 7% rise in firm valuation. “Growth isn’t just a nice-to-have, it’s essential for sustained success,” he said.
