2024 RIA M&A Activity Sets New Record for Wealth Management
In 2024, the world of registered investment advisors (RIA) has seen a significant surge in mergers and acquisitions activity. A report from DeVoe & Company reveals that this year has broken all previous records with a total of 269 transactions completed so far. This surpasses the previous record of 264 deals set back in 2022.
What’s remarkable is that the fourth quarter of 2024 is now the most active quarter in RIA history, boasting a whopping 78 reported deals as of December 17th. This milestone eclipses the prior record of 76 deals closed in the fourth quarter of 2021.
David DeVoe, the founder and CEO of DeVoe & Company, attributes this record-setting activity to several key factors. Interest rate cuts have lowered the cost of capital, while stock market gains have elevated RIA valuations. Additionally, large-scale firms, known as “meta-RIAs,” have enhanced their competitiveness, driving up the pace of acquisitions.
Looking ahead, DeVoe anticipates that M&A momentum will persist through the final weeks of 2024, providing a robust start to 2025. In their October RIA Deal Book, DeVoe predicted that major players in the RIA M&A arena would ramp up investments as capital costs decrease and debt service ratios improve.
Just this week, the Federal Reserve announced its third interest rate cut of the year by a quarter percentage point, further shaping the landscape for wealth management transactions in the coming months.
