- Benzinga Advisor
- Posts
- RIA Acquisitions Are At Record Highs - Here's Why
RIA Acquisitions Are At Record Highs - Here's Why
Here's how to join in
You're receiving this email because you're subscribed to Advisor from Benzinga. To manage your subscription, click the link at the bottom of this email.
Happy Sunday, and welcome to Benzinga’s financial advisor newsletter!
Today, we’re looking at new numbers showing RIA M&A activity is still growing at breakneck speeds, why that is, and what it means for advisories.
So, let’s get to it!
But first, did someone forward you this email? Click here to subscribe!
INDUSTRY CHATTER
The perfect storm of Registered Investment Advisor (RIA) mergers and acquisitions (M&A) is only growing stronger. According to a new study by Fidelity Investments, 2015 saw 89 RIA M&A deals, while last year saw a whopping 233.
Over the same decade, the value of acquired assets grew from $130 billion to almost $670 billion. This growth happened despite the spike in interest rates over that time.
The reasons are clear: advisory owners are growing older and looking for an exit strategy that lets them cash out and retire.
New Acquirers Are Thinking Long-Term
What is changing, according to Fidelity, is how buyers are acting, and who they're buying. Acquirers are becoming much more active in setting up a growth path for the RIAs they buy and merge. RIAs with more than $1 billion in client assets are beginning to get bought up too, and lots of new buyers are making moves recently.
But it's the serial acquirers that continue to lead the pack. Focus Financial, for example, closed 21 RIA M&A deals last year across its affiliates, while Wealth Enhancement Group bought 12 and Waverly advisors 10.
Clearly, there's a lot of appetite out there for buying and consolidating the RIA space.
October Was The Strongest M&A Month Yet
Appetite is so high, in fact, that last October was the strongest ever month for RIA M&A, Fidelity reports. This is down to deals taking about seven to nine months to close. So targets that get identified at the beginning of a year will end up acquired toward the end of that year.
Second, the presidential campaign included ideas about changing the tax treatment of unrealized capital gains, which may have pushed companies to close their deals before the New Year.
With that now looking less likely and interest rates down, it seems this RIA M&A wave isn't going away anytime soon. Small and large RIAs should take note, decide if they want to join in, and if so, work to increase transparency, reduce revenue risks, and develop clear plans for how to support and grow revenue streams, including through reaching new, younger clients.
MARKET RECAP
Inflation concerns loom over the U.S. economy, but Wall Street remains resilient as investors focus on optimism surrounding Ukraine peace talks and a tariff plan from President Donald Trump that appears less severe than initially feared—at least for now.
In January, the headline Consumer Price Index rose 3% year-over-year, exceeding expectations of 2.9%. On a monthly basis, inflation climbed 0.5%, significantly outpacing forecasts of 0.3% and marking the biggest jump since August 2023.
Energy prices were the main culprit, with fuel oil surging 6.2%, while egg prices skyrocketed 15%, hitting fresh record highs. Yet inflationary pressures were also evident among services.
Core inflation, which excludes volatile food and energy prices, edged up to 3.3% year-over-year, beating expectations of a decline to 3.1%. Additionally, inflation at the producer level surprised to the upside, signaling broad-based price pressures.
During his semiannual testimony before Congress, Federal Reserve Chair Jerome Powell reiterated there is “no rush” to cut interest rates.
In response, investors delayed expectations for the first Fed rate cut to December, signaling expectations of a prolonged period of steady rates. Some economists even speculated that a rate hike may be necessary to curb the inflationary wave.
Despite hotter-than-expected inflation, risk sentiment remained largely intact as Trump reportedly engaged in talks with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to initiate negotiations for peace in Ukraine. This news helped keep oil prices stable for the week.
On Thursday, Trump announced a plan to impose “reciprocal tariffs” on all countries, meaning the U.S. would match other nations’ tariff rates. Yet a study period lasting until April 1 suggests there is room for negotiations before any final implementation. The U.S. dollar weakened amid the less-aggressive tariff stance.
The standout performer of the week was Intel Corp. (INTC), which posted its strongest weekly rally since 1975. The surge was driven by a government push to expand domestic semiconductor manufacturing. Additionally, reports emerged that Intel may join forces with Taiwan Semiconductor Manufacturing Co. (TSM) in a joint venture, further fueling investor optimism.
THE WEEK AHEAD
Economic Data
Monday: Presidents’ Day
Tuesday: New York manufacturing index
Wednesday: Fed meeting minutes released
Thursday: US 30-year Treasury Inflation-Protected Securities auction
Friday: US monthly existing home sales
Earnings
Click here for the full calendar of economic data and earnings reports.
LEARN WITH BENZINGA PRO
BEFORE YOU GO
Were you forwarded this email? Click here to subscribe.
And be sure to check out our other newsletters:
Ring The Bell: Created for market enthusiasts by market enthusiasts, this twice-daily newsletter delivers top stories, fast movers, and hot trade ideas straight to your inbox. Subscribe here.
Future Finance: Where fintech, crypto, and the future of finance collide. Future Finance is a perfect lunch read packed with quick bites for industry enthusiasts. Subscribe here.
Cannabis Daily: A must-read daily briefing for cannabis investors, operators, and enthusiasts. Join our list of industry veterans to jump start your morning. Subscribe here.
Real Estate Weekly: Ready to elevate your real estate game? This weekly newsletter provides actionable insights whether you are investing in REITs, owning property, or delving into the fast-growing world of fractional real estate. Subscribe here.
Tech Trends: Get the inside scoop on AI, the hottest gadgets, and mind-blowing tech trends. Subscribe here.