Can you 'buy the dip' in RIA M&A?

Can you 'buy the dip' in RIA M&A?
From left: Jessica Polito, of Turkey Hill Management; Ken Stern, of Lido Advisors, Kyle Miller, of EP Wealth Advisors.
Lido Advisors' Ken Stern shares his 'opportunistic' M&A mindset on potential dropping RIA valuations amid Trump's tariff-triggered volatility.
APR 08, 2025

Investors often see stock market downturns as a chance to ‘buy the dip’ — but could that mindset extend to M&A activity in the RIA space? Even with the macroeconomic turbulence sparked by President Trump’s trade war, RIA valuations may prove too resilient to stumble.

“Our view is not a ‘hey this is an opportunity to buy the dip’ — our view is a long-term view,” said Kyle Miller, managing director of mergers & acquisitions at EP Wealth Advisors. “The first thing we did on Friday was just reiterate to our partners who we have under LOI about our conviction that we're going to close on the terms we agreed to.”

EP Wealth has already acquired three RIAs this year, most recently its addition of the $660 million firm Peninsula Wealth on April 2, bringing EP’s total AUM to over $31 billion. Miller expects EP Wealth to complete eight deals in the first eight months of this year, adding that a prolonged 90 to 120-day economic downturn would be more likely to impact the pace of M&A deals for RIAs rather than pricing or deal structuring. 

Ken Stern, president of Los Angeles-based Lido Advisors with roughly $25 billion AUM, sees the current market slump as a more opportune time to grow his RIA through M&A. Lido, whose private equity sponsors include Charlesbank Capital Partners and Constellation Wealth Capital, added $1.1 billion AUM in December via its acquisition of Avitas Wealth Management.

“We now have a market where certain RIAs — their cost of capital has gone up, and because the market's down, they might not have as much white space or dry powder to make the acquisition,” Stern told InvestmentNews. "So in the short term, could valuations come down? Maybe. And do I think of it opportunistically? Very much so.”

The M&A consulting firm Devoe & Company says that M&A activity for RIAs reached a record-setting 75 transactions in Q1 2025, which ended March 31 before the recent stock market plunge. Fellow consultancy Advisor Growth Strategies found in its RIA Deal Room report that the median-adjusted multiple on earnings before interest, taxes, deprecation, and amortization (EBITDA) for RIAs hit 11.0 in 2024, up from 9.9 in 2023, and a 37.5% increase from 2020. That multiple metric is often used to guide valuations in acquisition talks. 

“I haven't seen multiples come down dramatically, but what I have seen is fewer people at the table when we're looking at an acquisition target, and I think that might play out over the next couple quarters,” said Stern. 

“Dips are hard with attractive RIAs, because they continue to grow regardless of the market through referrals, through marketing efforts,” added Jessica Polito, founder of M&A advisory firm Turkey Hill Management. “A strong firm will command the same multiple regardless of what's going on at the macroeconomic level.” 

The RIA Modern Wealth Management expanded into California on Tuesday with its acquisitions of two firms, Wade Financial Advisory and Planned Asset Management. They bring $1 billion in AUM to Modern Wealth. “I don't think the value of these firms has been impacted at all. I think we found great partners — great people, great businesses, and we're excited to have them,” said Modern Wealth president Jason Gordo. 

"We’re in the midst of a bull market for M&A activity in the RIA industry, and we see that momentum continuing despite broader economic uncertainty," said Michael Belluomini, SVP, mergers and acquisitions at Carson Group, which bought a Michigan-based RIA this week. "Deal-making enthusiasm remains strong, and we don't expect acquisition activity to slow over the long term. A key driver is the growing number of advisors approaching retirement, many of whom see M&A as a practical solution for succession planning—fueling a steady stream of transactions."

Paul Schatz, founder of the Connecticut-based RIA Heritage Capital, can’t envision how smaller RIAs like his own could currently consider selling. “If I was a seller right now after the large decline, I certainly wouldn't sell my book unless I had to,” he said. “Would you really sell your book if your asset has depreciated by 8-10%, 15%, 20% in short order?”

Brandon Kawal, partner at Advisor Growth Strategies, conversely thinks that RIAs who have been considering selling can now be further pushed to do so amid resource squeezes and their added stress of serving clients in a downturn. 

“It could actually motivate some firms that were sitting on the fence to evaluate M&A in a more meaningful way, because the pain will grow,” Kawal said. “Because if you needed resourcing and you needed support, if you have this volatility, it probably amplifies those issues.”

Polito, whose RIA M&A advisory Turkey Hill Management predominantly represents sellers in transactions, foresees adaptations to deal structuring as more likely than valuation drops.

“If the volatility and downturn continues into the second quarter and through the second quarter, then we'll probably have to get creative with how deals are priced,” she said. “So either we're going to see a pause or we're going to see maybe less taken upfront or more rolled into equity. As the market recovers, maybe we see bigger retention payments, bigger earn-out payments. “ 

But those outcomes still don’t feel especially close, even as the S&P 500 has slid more than 10% as of Tuesday’s close since Trump’s "Liberation Day" on April 2.

“It's been business as usual, honestly,”  Polito said. “We're super active right now.”

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