Devoe: Record-breaking RIA M&A run led by private equity's consolidator comeback

M&A activity among RIAs set a new record in the first half of 2025, as private equity-backed consolidators accounted for more than half of all buyers for the first time since 2022. After declining to 45% of acquirers in 2024, consolidators have surged back to 53%, according to DeVoe & Company’s new Q2 2025 RIA Deal Book.

Devoe’s 148 tracked M&A transactions marks an all-time high for a January-through-June period and a 17% jump over the same period last year.  After 75 transactions in Q1 followed by a record-setting second quarter of 73 transactions, Devoe & Company says 2025 is on track to surpass last year’s all-time high of 272 RIA M&A deals.

Consolidators, backed by private equity to follow a roll-up model of acquiring RIAs, reached an all-time high 54% of acquisitions in 2021 before steadily dropping to 50% in 2022, 47% in 2023, and 45% last year according to Devoe & Company. Consolidators completed 79 transactions in the first half of the year, a 41% increase over the same period in 2024.

“That apex of 54% steadily dropped several percentage points each year, as many Consolidators struggled with decisions about pushing their debt ratios in such a high-interest rate environment,” reads Devoe & Company’s latest report. “That restraint has now shifted to acceleration. Following the Federal Reserve’s September 2024 rate cuts, reduced debt service costs and improved access to capital paved the way for reengagement.”

Merit Financial Advisors, which won RIA Firm of the Year at 2025 InvestmentNews Awards, completed nine first half transactions this year, as the most active consolidator tracked by Devoe & Company. Merit announced new minority investment from Constellation Wealth Capital earlier this month, as fellow private equity firms Wealth Partners Capital Group and HGGC’s Aspire Holdings exited their positions after originally investing in Merit in 2019.

“We've done eight acquisitions so far this year, we got another six LOIs [Letter of Intent],” Merit CEO Rick Kent said at IN Awards on June 24. “We're gonna end up with 17 or 18 acquisitions [in 2025], that's inorganic growth. It's difficult to bring those people in, get them focused and marching in the same direction. There's something magic going on in Merit that allows us to do that.”

Behind Merit as lead first half consolidators tracked by Devoe were firms EP Wealth and Wealth Enhancement (both with 7 transactions), Focus Partners  Wealth and CW Advisors (six), and the trio of Cerity Partners, Mariner, and Mercer all completing five M&A transactions. 

“The amount of free cash flow that they're [private equity firms] requiring to make an investment continues to go down,” Jessica Polito, founder of M&A advisor Turkey Hill Management, told InvestmentNews. “Right now, it's hovering at like a minimum free cash flow of $5 million, though I'm having increasingly more conversations with firms that are willing to take minority stakes in even smaller advisors with the same investment theory, which is it's easier to 3x [valuation] off of a lower base.”

RIAs — those not considered serial acquirers driven by private equity - are not keeping up with the surge in M&A activity from consolidators. Devoe & Company separates buyers into three categories: consolidators, RIAs, and “other” - which includes private equity firms, banks, insurance platforms, and wirehouses. The other category represented 20% of buys for the first half of 2025 while RIAs represented 27%.

“RIAs are not keeping pace with the surge in activity from Consolidators. In the first half of the year, RIA acquirers completed 40 transactions, four less than at this point last year. Yet their market share has fallen from 36% in 2024 to 27% in the second quarter of 2025. The sharp reversal highlights how quickly Consolidators can change the complexion of the marketplace when they collectively take action, as well as how influential the Consolidator check book can be,” reads the Devoe & Company report.