2024 Adviser Acquisition Activity Reaches All-Time Highs, Reveals Succession Resource Group

Succession Resource Group (SRG) disclosed findings from its annual review of adviser acquisitions, reporting significant growth despite economic challenges. The analysis revealed 188 transactions totaling over $25 billion in assets under management, indicating resilience in the M&A market for advisory firms.

The report demonstrated an uptick in RIA/recurring revenue multiples to 3.02, a 7.9% increase from the previous year. This rise underscores strong market demand and higher valuations driven by factors such as sustainable growth and an interest from larger buying firms. Additionally, the presence of out-of-state buyers amplified competition, accounting for 25% of all deals in 2024.

Market trends showcased the impact of high-interest rates on deal activity, though demand remained robust with an 85:1 buyer-to-seller ratio. The accessibility of third-party financing played a significant role, especially for deals involving broker-dealers offering advantageous loan terms. Moreover, the landscape has shifted towards earlier succession planning, with a marked increase in utilizing external capital for next-generation adviser buy-ins.

Private equity’s role has magnified within the sector, contributing to the heightened valuations. Despite perceptions, these entities often employ innovative deal structures that seem lucrative but are contingent on achieving ambitious growth targets. SRG’s President, David Grau Jr., emphasized the importance of preparedness for exiting advisers amidst a potentially shifting market environment.