The wealth management industry is consolidating at an unprecedented pace. According to ECHELON Partners, 466 M&A transactions closed in 2025, up 27% from 2024. Private equity now controls nearly $6 trillion in RIA assets according to AdvizorPro, representing roughly 23% of all assets managed by firms with $100 million or more. According to Mercer Capital, PE-backed firms accounted for 53% of all acquirers in Q2 2025, up from 45% the prior year.
The Hidden Costs Of Consolidation
Large institutions operate under constraints most clients never see: Investment committees have to approve managers and strategies, limiting flexibility when markets shift. Multi-year vendor contracts lock technology platforms in place, preventing firms from adopting better tools. Compensation structures reward asset gathering over outcomes, creating pressure to grow relationships faster than service quality can support.
Individual advisors aren’t to blame for the limitations built into the operating structure of consolidated firms; no amount of fiduciary training can change the fact that a $10 billion RIA backed by private equity has different priorities than a smaller employee-owned firm.
They do, however, suffer the consequences. Management pushes them toward proprietary funds even when third-party alternatives perform better, while corporate mandates force them to use standardized investment models that don’t fit every client’s situation. The firm separates tax planning from investment management into different departments, preventing the integrated approach advisors know their clients need.
Institutional friction hits hardest when clients need sophisticated help.
Institutional friction hits hardest when clients need sophisticated help. A business owner planning to sell their company can’t wait three weeks for an investment committee to approve a tax-loss harvesting strategy. An executive with concentrated stock needs immediate coordination between their tax advisor and portfolio manager, not a referral to a separate wealth planning department. A family transferring wealth across three generations needs one integrated strategy, not siloed recommendations from different divisions chasing different revenue targets.
Committee approvals and standardized processes fundamentally prevent the kind of nimble, integrated thinking that modern, complex situations demand.
The Difference Independence Makes Today
Ten years ago, joining a larger platform meant gaining access to capabilities independent advisors couldn’t build themselves. But custodial platforms now offer enterprise-grade tools to firms of any size. Planning software, portfolio management systems and client reporting have become commoditized. Small firms can deliver institutional-quality service without institutional overhead, eliminating the main argument for consolidation.
Today, a well-structured independent firm can access the same investment managers, the same technology and the same service providers as any national platform. The difference comes down to decision-making speed and alignment of interests. When client needs drive every choice instead of corporate requirements, the quality of advice improves.
The difference comes down to decision-making speed and alignment of interests.
The stakes get even higher when you consider the wealth transfer underway, with Cerulli predicting that over $124 trillion in assets will transfer through 2048. According to Capgemini, 81% of heirs with $1 million or more in investable assets plan to replace their parents’ wealth management firms, citing poor digital offerings and lack of personalized service. Firms that thrive during this massive generational shift will do so by prioritizing client needs over corporate mandates.
The Impact Of Independence On Modern Complexity
Clients today have more options than ever before: robo-advisors as an entry point to investing, national platforms for standardized wealth management and specialized independent firms for complex planning.
The firm’s ownership, compensation model and decision-making authority directly impact the quality of advice you receive.
For clients with straightforward situations, consolidated platforms may work fine. But for business owners, executives and families navigating complex wealth transitions, the firm’s structure often determines outcomes. The firm’s ownership, compensation model and decision-making authority directly impact the quality of advice you receive.
When clients need integrated thinking, customized strategies and advisors that act solely in their interest, independence can be the difference between adequate service and exceptional outcomes.
Zane Keller is Co-Founder and CEO of Ducere Wealth.
This article is published under WSR’s partner program and was not written by WSR’s staff or editors. For more information on how to participate in the partner program, contact zack.drew@wealthsolutionsreport.com. Views expressed are the author’s and do not necessarily reflect the views of WSR.
