The financial services sector in 2024 has been marked by an unprecedented surge in registered investment adviser (RIA) mergers and acquisitions (M&A), as the industry recorded a record-breaking 269 transactions, surpassing the previous high of 264 set in 2022. This remarkable increase is largely attributed to the myriad benefits offered by scale and succession planning, driving a significant number of firms to merge or acquire. The most active quarter on record was Q4 2024, during which 78 transactions were completed, reflecting the industry’s increasing inclination towards consolidation and strategic realignment.
Unprecedented Growth of RIA Mergers and Acquisitions
Throughout 2024, the registered investment adviser (RIA) sector witnessed a considerable rise in mergers and acquisitions, with companies actively seeking to leverage the benefits of consolidation to enhance their competitive edge. Firms are increasingly pursuing mergers and acquisitions as a means to create scale, improve operational efficiencies, and streamline succession planning strategies. This trend is underscored by the latest data, which reports a record 269 transactions in 2024, breaking the previous record of 264 in 2022.
The surge in transactions can be attributed to various factors, including the need for firms to remain competitive in an increasingly crowded marketplace, the desire to offer a broader array of services to clients, and the necessity of preparing for leadership transitions. By merging with or acquiring other RIA firms, companies can achieve economies of scale, enhance their service capabilities, and better position themselves to navigate the challenges and opportunities within the financial services landscape. The fourth quarter of 2024 alone saw 78 transactions, marking it as the most active quarter in history for RIA deals.
Strategic Partnerships and Service Expansions
In addition to record-breaking mergers and acquisitions, several strategic partnerships and expansions have significantly impacted the industry in 2024. One notable example is the Cerrado Group’s announcement of Tristar Pension Consulting as a new member firm. This move expands Cerrado Group’s service capabilities in retirement plan management. Led by CEO Shannon Edwards, Tristar brings over 25 years of experience in serving plan sponsors of various sizes. This addition enhances Cerrado Group’s extensive portfolio, which now encompasses over $25 billion in assets under management.
Another key development is NFP’s acquisition of Salus Group, an independent employee benefits consulting firm based in Michigan. Established in 2005 and led by CEO Michael Brillati, Salus Group has built a solid reputation by focusing on middle-market employers and unionized workforces. This acquisition not only strengthens NFP’s presence in Michigan but also enriches its service offerings in the employee benefits sector. Through strategic expansions like these, firms are able to diversify their service portfolios, cater to a broader client base, and enhance their overall market presence.
Investment in Expertise and Resource Enhancement
Strategic investments in expertise and resources have also been emblematic of the financial advisory sector’s growth in 2024. A prime example of this trend is Summit Financial’s minority stake investment in Gordon Asset Management. The deal, marking Summit’s 18th investment of the year, emphasizes a focus on combining strengths to achieve better outcomes for clients. Gordon Asset Management, managing $220 million in assets and $1.1 billion in qualified plan assets, will maintain its original leadership team while benefiting from Summit’s extensive legal, tax, financial planning, and investment expertise.
Such investments highlight the importance of leveraging collective expertise to enhance service offerings and achieve growth. By integrating complementary businesses and combining resources, firms like Summit Financial are able to offer clients a more comprehensive suite of services, resulting in a more robust market position. This trend reflects a broader industry movement towards strategic collaborations and resource sharing, aimed at delivering greater value to clients while fostering long-term growth and stability.
Navigating the Evolving Financial Landscape
In 2024, the financial services sector has experienced an unparalleled rise in mergers and acquisitions (M&A) among registered investment advisers (RIAs), with a record-setting 269 deals. This surpasses the previous high of 264 transactions set in 2022. This substantial growth can be attributed to the numerous advantages that come from increased scale and effective succession planning, leading many companies to either merge or acquire others. The busiest quarter ever recorded was Q4 2024, in which an impressive 78 transactions took place. This trend points to a growing preference within the industry for consolidation and strategic realignment, where firms are actively seeking to expand their capabilities and resources. Industry experts believe that this focus on consolidation will not only provide individual firms with greater leverage and operational efficiency but also prepare them for future market challenges. This wave of M&A activity demonstrates the sector’s ongoing evolution and its adaptation to a rapidly changing financial landscape.
