DeVoe & Company’s new Annual RIA M&A Outlook, released Monday, reveals that, “after two years of recalibration” in the industry, a higher number of RIA executives expect M&A activity to grow in 2026.
Of advisory firms surveyed, 54% anticipate M&A transaction volume will increase over the next 12 months, representing what DeVoe & Company says in the report it sees as a “meaningful jump and notable change in outlook.”
“This marks a multi-year progression,” the report says, noting expectations grew from 18% in 2023 to 42% in 2024. The report says that only 2% expect a slowdown.
Over 100 RIA executives participated in the latest survey, representing firms with client assets under management (AUM) from $100 million to more than $10 billion, according to DeVoe & Company.
Key insights from the survey highlighted the hurdles that many firms in the sector face.
For one thing, succession has reached a “breaking point,” according to DeVoe & Company, which says two-thirds of RIA leaders pointed to the lack of succession planning as a major issue but “only 22% believe their successors can afford to buy them out.” The firm says the latter challenge is due to an “affordability gap” that grows with higher valuations and concentrated equity in founders’ hands.
“Organic growth has joined succession planning as the industry’s greatest vulnerabilities,” David DeVoe, Founder and CEO of DeVoe & Company, told WSR by email.
“Organic growth has joined succession planning as the industry’s greatest vulnerabilities.” — David DeVoe, Founder and CEO, DeVoe & Company
Over 50% of RIA leaders surveyed cited organic growth as their top worry, the report says. “This concern now drives both buyer and seller behavior in M&A, with growth serving as the #1 motivator for 79% of buyers and 49% of sellers,” the firm told WSR by email.
For the first time since launching the DeVoe RIA M&A Outlook Survey, the report also notes that culture has become the top attribute buyers seek, selected by 69% of acquirers.
“After years of integration lessons, firms now view culture as the backbone of sustainable growth,” according to DeVoe & Company.
Also, AI and other technology is serving to “accelerate a new era of efficiency,” the firm says. “80% of advisors believe AI will positively impact the industry, with the majority expecting meaningful improvements in advisor efficiency and client experience.”
The report goes on to say that the RIA M&A “resurgence carries a distinctly different tone than prior peaks. The exuberance that defined 2021’s record-breaking wave has given way to experience-driven discipline.”
The report adds, “Firms are pursuing growth with keen focus and more measured expectations about valuations, capital, and strategic fit. The outlook for increased volume in activity has returned, but it is tempered by the lessons learned during a volatile two-year cycle.”
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
