Fidelity’s Scott Slater says PE shops will increase their pursuit of RIAs

Advisory firms should consider both the advantages of deeper pockets and the drawbacks of less freedom.

With private equity firms now investing upwards of $3 billion a year into the RIA space, owners of financial advisory firms need to weigh the pros and cons of what it means to accept outside capital.
Scott Slater, vice president of practice management and consulting at Fidelity Clearing & Custody Solutions, says the trend of PE firms pushing into the RIA space is only just beginning because outside investors view the advice business as a stable investment with steady income.
(More: Is the private-equity zeal for financial advice firms likely to continue?)
However, he added, owners of financial advisory firms need to proceed with their eyes wide open, fully understanding the tradeoffs of selling a piece of the business to an outside investor.