Despite a volatile start to 2025 in the public markets, M&A activity in the RIA space surged ahead at a record-setting pace in the first quarter, according to a new report from Echelon Partners.
A total of 118 transactions were announced in the first three months of the year, the highest deal volume ever recorded for a first quarter and the second-most active quarter overall, falling just shy of the 125 deals logged in Q4 2024. With that momentum, Echelon projects approximately 370 deals to come through by year-end, potentially making 2025 the most active year for RIA M&A in industry history.
“A portion of this volume may stem from a backlog of deals closed in 2024 that were announced after the start of the new year,” the report said. “Echelon anticipates that this strong start sets the tone for a robust year of M&A.”
While the number of transactions dipped 5.6 percent from the previous quarter, total transacted assets rose 7.6 percent to $805 billion, reflecting increased interest in larger targets. More than one-third of deals in Q1 involved firms with over $1 billion in assets.
In its Q3 2024 RIA M&A Deal Report last year, Echelon flagged the growing trend of whale-watching among industry buyers, predicting the number of deals targeting firms in the billion-dollar club would rise by 12.1 percent in 2024. With 50 transactions on that scale occurring in the first quarter alone, the latest report projects a 14.3 percent increase in such deals this year.
Strategic acquirers – primarily RIAs with private equity backing – drove roughly seven-eighths (87.3) percent of total deal activity in Q1, with financial sponsors accounting for the remaining 12.7 percent. Among the top transactions in the past three months, LPL’s surprise $2.7 billion purchase of Commonwealth stood out as an outlier, along with Mariner's January mega-acquisition of Cardinal Investment Advisors, which adds $292 billion in institutional assets under advisement to Mariner’s platform.
Private equity firms were involved in 15 direct investments during the quarter, including Rise Growth Partners' stake in Grimes & Company and Merchant Investment Management’s increased position in Summit Financial. While the number of mega-deals fell, the total assets involved in PE-backed deals grew from $34.3 billion in Q4 2024 to $56 billion in Q1.
“The moves by Mariner and Merchant Investment Management reflect a broader industry shift toward integrated financial services,” the report noted, pointing to a trend of firms offering a full suite of planning, investment, tax, and consulting services through M&A.
The average size of deals rose modestly as well, with average AUM per transaction estimated at $1.6 billion, up from $1.4 billion in 2024. Among strategic acquirers, the proportion of deals involving sellers with more than $1 billion in assets climbed to 35.9 percent, up from 33 percent in the previous quarter.
The data also highlighted continued strength in wealth tech deal activity. Thirty-five transactions were recorded in the first quarter, consistent with the pace observed in the second half of 2024. Several of those involved capital raises and acquisitions of advisor technology providers, such as AI-powered CRM tools and outsourced back-office platforms.
Echelon’s report suggests the pace of dealmaking could moderate slightly through the middle of the year as firms replenish deal pipelines, though the trajectory still points to historic annual volumes.
“Given the industry’s resilience during 1Q25, Echelon expects 2025 to be the most active year in dealmaking history,” the report said.
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