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Wealth Management M&A Activity Remains Strong

Business Growth Strategies

Notwithstanding challenging markets and the rising cost of capital, July M&A activity among registered investment advisors and independent broker-dealers continued 2022’s rapid pace. 

According to Fidelity Institutional’s latest Wealth Management M&A Transaction Report, July M&A saw 13 RIA deals totaling $20.7 billion and one $5 billion broker dealer purchase by LPL.

Overall, there have been 131 RIA transactions totaling $180.8 billion through July, which is up 36% as compared to the year-to-date totals from 2021 and a 16% increase in AUM. In addition, there have been three broker dealer deals totaling $63 billion in AUM so far this year. 

Deals of $1 billion or more also remained high, the report notes, with five in July and 39 year-to-date. Among those were Mariner Wealth Advisors’ acquisition of community bank-focused $7.9 billion Heber Fuger Wendin Investment Advisors, CAPTRUST’s purchase of $4.1 billion Frontier Wealth Management, and Pathstone’s acquisition $3.5 billion Dyson Capital Advisors. 

Six of July’s 13 RIA transactions included deals of less than $300 million in AUM, as 2022 activity remains strong in this segment of RIAs in what continues to be largely a seller’s market, Fidelity notes. “While $1 billion-plus deals remained high, the significant 2022 uptick in sub-$500 million transactions drove the growth in total transactions,” notes Scott Slater, M&A specialist and Fidelity Institutional Vice President of Practice Management & Consulting. 

“Despite these challenging markets and rising cost of capital, leading RIA buyers indicate they remain committed to their long-range strategies to create scale, acquire top client facing and professional talent and enhance service capabilities and technology platforms,” Slater continues.  

Fidelity’s report seeks to capture the M&A deals involving:

  • wealth management firms registered with the SEC as an RIA, including transactions identified with over $100 million in assets under management/advisement, but less than $30 billion;
  • breakaway advisors and/or advisory teams who are leaving a financial institution to join a wealth management RIA and who are expected to bring over at least $100 million in AUM to the new business; and 
  • independent broker-dealer firms registered with FINRA including transactions identified with over $1 billion in AUA. 

While this report focuses primarily on July acquisitions, there have already been a number of significant deals in August, including Hub’s acquisition of WealthPlan Advisors, Edelman’s purchase of Smart Investor, and the merger of MGO Investment Advisors and One Seven.