Registered investment advisory firms posted record-breaking merger and acquisition activity in the first quarter of 2025, according to newly released reports from DeVoe & Company and Echelon Partners.
DeVoe logged 75 transactions during the period, while Echelon, using a broader methodology, recorded 118 deals. Despite their different measurement approaches, both firms confirmed that M&A activity in the RIA space has never been higher for a first quarter.
However, whether this momentum can sustain itself against a backdrop of increasing stock market volatility and mounting economic headwinds remains uncertain. The S&P 500 is currently down about 6% year-to-date, driven largely by concerns over tariffs and slowing economic growth. Earlier this month, the index briefly slipped into bear market territory. DeVoe's report highlights that RIA M&A activity is historically sensitive to significant equity market downturns.
“The next quarter and the rest of the year promise to be dynamic given the macroeconomic and policy landscape,” the DeVoe report notes. “History suggests that major stock market declines or prolonged volatility tend to suppress M&A activity among RIAs. While several structural forces could continue to fuel dealmaking, the current geopolitical uncertainty clouds near-term expectations.”
Despite these cautionary notes, the fundamental drivers behind RIA consolidation have proven remarkably durable. Private-equity firms continue to pour capital into the sector, drawn by the reliable cash flows and recurring revenue streams that RIAs offer.
Demographic shifts, particularly the ongoing retirement of baby boomer advisors, are accelerating ownership transitions. At the same time, rising compliance and technology costs are pushing many independent firms to pursue greater scale.
“With a growing supply of sellers and an expanding pool of buyers, we’re witnessing yet another record-breaking start to the year,” said David DeVoe, founder and CEO of DeVoe & Company.
Echelon’s analysis emphasizes that the strength of first-quarter M&A activity is particularly noteworthy given the market turbulence during the same period. “The industry’s resilience in 1Q25 suggests that 2025 could set a new high-water mark for RIA dealmaking,” the report states.
Corey Kupfer, founder and managing partner of Kupfer & Associates, echoes that sentiment but adds a note of caution. He believes RIA M&A will remain active and is cautiously optimistic about the year ahead. However, he warns that a full-fledged recession could alter the landscape considerably. “If a recession hits, sellers will likely be more reluctant to transition their businesses, and access to acquisition financing would tighten,” Kupfer said.
One of the most notable trends is the increasing size of the firms being acquired. According to DeVoe’s data, the average assets under management (AUM) of a selling RIA reached a record $1.2 billion during the first quarter, up from an average of $929 million in 2024. This growth reflects not only rising equity markets over the past few years but also a growing appetite among buyers for larger transactions.
DeVoe reports that 25 RIAs managing between $1 billion and $5 billion in AUM completed transactions during the quarter. “This segment is particularly attractive for today’s well-capitalized buyers,” the report explains. “Large transactions often require as much effort as smaller deals but deliver significantly more value. With the Federal Reserve lowering interest rates, PE-backed buyers have become more aggressive, strategically targeting larger acquisitions to maximize returns.”
Echelon’s report anticipates a continued strategic shift in acquisition activity. Rather than focusing solely on size, more firms are seeking to expand their service offerings through targeted acquisitions. The wealth management industry is increasingly embracing an integrated financial services model, one that goes beyond portfolio management to include tax planning, estate planning, institutional consulting, and other holistic services.
This evolution reflects a broader trend: RIAs recognize that offering comprehensive solutions strengthens client relationships, improves retention, and differentiates their firms in an increasingly competitive marketplace. Echelon believes that many buyers will prioritize acquisitions that complement or extend their existing capabilities rather than simply adding AUM.
Even as broader economic risks loom, the current momentum reflects a deep and enduring transformation within the RIA industry. Firms that can combine scale, service expansion, and operational efficiency are positioning themselves to thrive, regardless of near-term market fluctuations.
For wealth advisors and RIAs contemplating their strategic options, the first quarter of 2025 underscores that the window for dealmaking remains open—at least for now. However, careful attention to market signals, client dynamics, and capital conditions will be essential to navigating what promises to be an unpredictable year ahead.
