RBC mulls M&A push in US wealth management

Royal Bank of Canada is sharpening its focus on the US wealth management market, with chief executive officer Dave McKay signaling a willingness to pursue acquisitions of established firms as part of a broader growth strategy.

Speaking to Bloomberg, McKay said the bank is interested in acquiring “highly coveted” wealth management businesses that can bring in new clients and, critically, contribute significant sweep deposits to bolster RBC’s funding base in the United States.

“We want more customers, we want that relationship,” McKay said, emphasizing the importance of deepening client connections through both organic growth and targeted deals.

While McKay did not name specific acquisition targets, he acknowledged that several “high-quality wealth franchises” are on RBC’s radar, and that any move in the market would likely face stiff competition from other buyers.

“It would be, I think, a very aggressive bid for them by a number of players and, therefore, can you make the numbers work?” he said.

RBC’s US wealth management arm, which includes City National Bank in Los Angeles, reported $6.4 billion in revenue for the most recent fiscal year – a nearly 12% increase from the prior year.

It's proven to be a destination of choice for many elite teams leaving other wirehouses in the US. This year, it's already attracted several billion dollar-plus advisor teams from UBS, presumably due to the Swiss-based bank's decision last year to rewire its pay grid at the expense of its advisors, which it's now looking to reverse.

Read more: After watching advisors walk, UBS adjusts pay plan, a boost for some advisors

RBC Wealth Management counts itself among the largest financial services firms in the United States, with $640 billion in total client assets as of April 2025 and more than 2,200 financial advisors operating from 192 offices across 42 states.

Sweep programs, which automatically transfer uninvested cash in brokerage accounts into higher-interest accounts, are a particular focus for McKay as RBC looks to enhance its funding capabilities and attract new business.

“It wouldn’t be asset management. It would be on the wealth-distribution side,” McKay told Bloomberg.

RBC’s market capitalization stands at roughly $215 billion, giving the bank the theoretical capacity to consider major deals including, as McKay noted, a firm as large as Charles Schwab, which has a capitalization of $176 billion.

Charles Schwab is one of the companies with the best 401(k) programs. Read the full list here.

However, McKay cautioned that any acquisition would need to be accretive and deliver value for shareholders.

“We’ve got lots of capital, lots of ability to do it. The challenge is you’ve got to make it accretive,” he said.

Coming out a winner in any bidding war – particularly if one wants to avoid the winner's curse – will likely be a challenge, as the US wealth industry is going through a period of rapid consolidation.

One estimate by analysts at Oliver Wyman and Morgan Stanley predicts one-fifth of all wealth and asset management firms could be acquired by 2029, with more than 100 significant deals expected annually. Much of this activity is being driven by private equity firms, which are increasingly active buyers, as well as wirehouses and large RIAs seeking scale and new capabilities.