The impact of mergers and acquisitions (M&A) in the registered investment adviser (RIA) channels has rippled across the financial advice industry. A fragmented market with a growing service sector and a recurring revenue model, the RIA channels are attracting the attention of private equity (PE) giants that typically dominate sectors like industrials, technology and healthcare, according to Cerulli’s latest white paper, Private Equity Carves Out Its Place in the RIA Space.
Based on Cerulli’s market estimates, the opportunity for RIA acquisitions grew to $3.7 trillion as of year-end 2021. The “buy to build” model is particularly effective in the RIA space, where the market is highly fragmented and few growth-focused businesses achieve the scale necessary to succeed as acquirers. This has built a steady base of RIA firms ripe for consolidation and partially fueled the affiliate growth of RIA
