As the number of wealth management M&A deals reaches new highs in 2025, the marketplace is getting more crowded and immersed in the details of those hundreds of transitions.
That means strategic questions — like how to move the seller’s client accounts over to the buyer in the quickest and most tax-friendly manner and whether a merger of equals is a possibility — are adding complexity atop conventional issues such as who will be the winning suitor and how much will they pay.
Most mergers of equals create a new company out of the combination of two parties of roughly the same size. Such deals remain “exceedingly few and far between” in wealth management, according to Jessica Polito, founder of M&A advisory firm Turkey Hill Management. But that could change, as sellers seek the means of retaining more control of their operations after striking a deal with one of the expanding ranks of buyers investing in wealth management firms.
“It’s becoming harder to stand out, even among the larger RIAs, and a merger is a good way to add an established business line that a large company would otherwise have to create from scratch,” Polito said. “It’s a quick way to add another revenue stream and add more services for clients without having to create a team from scratch and build it.”
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Move fast but don’t break things
Efficiency in the post-deal movement is emerging as a key component of negotiations ahead of the transaction, according to Michael Camp, the head of client solutions at 55ip, a tax-focused investment technology firm owned since 2020 by JPMorgan Chase. In that capacity, Camp leads the firm’s transition services unit, which assists the parties to M&A deals in their post-deal account migrations.
Missing tax-basis information, surprise capital gains and other speed bumps can draw out the process to the point that, for sellers talking to interested potential buyers, “the quicker they get the investor from where they are to where they need to go” has turned into a key aspect of an acquiring firm’s pitch, Camp said. He has seen some migrations go as fast as just three months after close, but roughly six months or at least the same calendar year as the financial side of the transaction is usually acceptable, he noted. But that takes preparation prior to the deal. And transition timing as long as 18 months or multiple years could drive the financial advisors and their teams crazy and send clients packing for a different firm.
“It comes down to having that one-on-one conversation, but they’re trying to do this across 500 households, many times,” Camp said. “It’s always this distraction that’s sitting in the background, and it doesn’t allow them to get to the good part of why they’re doing this transition.”
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Increased deal flow
While M&A deals have been reaching record volumes for the better part of the past decade or more in wealth management, the level of registered investment advisory firm transactions “has once again moved into unprecedented territory” after a new high of 94 in the third quarter, according to the latest DeVoe RIA Deal Book from strategic advisory firm DeVoe & Company.
“This activity was not an isolated spike — it was the latest in a string of unusually strong quarters,” the report said. “This acceleration has been fueled in part by the Federal Reserve’s four interest rate cuts that began in late 2024. The lower cost of capital reinvigorated private equity-backed consolidators and emboldened serial acquirers to pursue transactions with fervor. On the sell-side, RIA leaders continue to seek scale, expanded capabilities and succession solutions while taking advantage of strong valuations. This convergence of motivated buyers and sellers has propelled M&A activity to unprecedented levels.”
That report focuses specifically on RIA deals, but all of the industry’s channels combined to hike up wealth management transaction volume by 69% year over year to 125 in the third quarter, according to the quarterly tracker maintained by investment bank and consulting firm Echelon Partners. That tied the prior all-time high volume set in the fourth quarter of last year. So far in 2025, Carson Group (14), Merit Financial Advisors (14), Mariner Wealth Advisors (10), Mercer Advisors (10), Wealth Enhancement (10), EP Wealth Advisors (9) and Beacon Pointe Advisors (9) have announced the most acquisitions of any dealmakers in the industry. By Echelon’s conservative estimate, transactions are on pace to top last year’s total by more than 100 deals.
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Lurking pitfalls and alternative ideas
In that environment, advisors often say they’re getting calls and emails from prospective buyers or other external investors all the time.
A merger of equals would play out much differently for the seller from the RIA or advisory practice changing hands in a traditional acquisition. With a merger of equals, the two parties reach an agreement about the amount of stock that each will have in the new entity after undergoing independent valuations of their firms, Polito noted. The process of finding out which party is more valuable than another in itself could provoke some arguments.
But other conversations about, say, which functions at what party will stay in place after the deal or the branding of the combined entity may add to the pain of the discussions. The contrast in valuations explains why those so-called merger of equals deals are “almost never 50-50” in a halfway split between the two parties, a setup for the joint venture which would be “like one in a million” in wealth management, she said.
“Both sides have to really want to go through this difficult and arduous exercise of getting to a successful merger,” Polito said. “If it’s successful, then you have complete control over your destiny at the combined entity. There’s a lot less acquiescence that needs to happen. … You’re crafting this new company together with your partner, which is very different from selling to a pre-existing entity.”
Even in a standard acquisition, tax and technology traps could cause unexpected payments to Uncle Sam or the strain of a frustrating and time-consuming transition. That’s why it’s important for the parties to begin planning for the technical side of the accounts migrating to any new platforms about six months before the close of the deal, Camp noted.
One big component of those hassles revolves around any switch in custodian. The deal parties must ensure that the seller is “not going to be forced out of positions” through trades that bring early redemptions carrying capital gains or fees and reconcile any missing basis information down to every individual tax lot held in a given portfolio, Camp said. Otherwise, a tax hit or headache could come up as an unintended consequence of an M&A deal.
“That’s where you potentially lose that client, lose that deal,” he said. “Oftentimes we’re able to go with the acquiring firm presale to create that confidence and conviction for advisors.”
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