Competitive threats are lurking beneath the surface of the dominant industry headlines about the massive growth of the largest registered investment advisory firms, a new study said.
Those perils come from the need to recruit and retain top financial advisor talent and engage younger generations of clients, according to a report last month on the future of RIAs by New England Consulting Group, which lists wealth management giants like Charles Schwab, Merrill, Morgan Stanley and Citi among its clients in the financial services industries. And, as shown in the list below of anonymous quotes collected by the consultants from more than three dozen interviews, many advisors and executives privately express skepticism — or even vent their outright frustration — about the ability of the largest RIAs to meet those challenges.
Advisors’ ambivalence about the role of private equity investors, barriers to their independence and a dearth of support from corporate headquarters in areas like practice management and content to share with clients and prospects could crimp the momentum of the RIA aggregators currently rolling up much of the industry, according to Tom Sebok, managing partner and principal with the consulting firm, and Tim Munoz, an advisor and principal. The conversations with advisors and executives in the study led to “where they had the greatest interest and, almost, where they wanted to unburden themselves,” Munoz said.
“The churn rate, the mobility of advisors has always been a big thing, and now, with the consolidation, you’d expect that the churn would start to slow down.… It doesn’t seem to be doing that,” Munoz said. “They are really pretty dissatisfied with the ownership of large firms.”
An “absence of perceived value in associating with a bigger firm” and the “inherent independent streak” of many advisors is driving that discontent, Sebok said.
“The posture that they take with clients whose assets are in their care has been most successful when they present themselves as having a genuinely independent and bespoke set of guidance and recommendations,” he said. “That independent streak doesn’t go away when they link up to a bigger firm.”
To be fair, the requirements to reel in top talent and forge multigenerational relationships among clients and advisors have come to the forefront of many industry discussions in recent years. The so-called Great Wealth Transfer will send $83.5 trillion to members of Generation X, millennials and Generation Z by 2048, according to the Capgemini Research Institute’s latest annual World Wealth Report. And 81% of high net worth heirs plan to drop their parents’ wealth management firm within two years of their inheritance, a survey in that study found.
Current economies of scale will continue to lend the largest RIA firms “a major competitive advantage” for the next few years, according to Mike Byrnes, the founder and president of wealth management business and marketing strategy consulting firm Mike Byrnes Consulting. But the onslaught of artificial intelligence and other technology tools could soon remove part of that edge. Custodians and brokerages that both compete with RIAs and work with them could soon “create a technological solution that’s packaged together so the solo practitioner doesn’t have to spend their time and dollars on it,” he said.
“What AI is going to do is, it’s going to allow people to work less hours and make more money,” Byrnes said. “The way that those owners will benefit is to be more efficient, and that’s their problem right now. I think that AI solves that in the coming years.”
With a lot of concern and uncertainty about the future course of RIAs, the advisors and executives New England spoke with displayed “a surprising unanimity of views on what to do,” the report concluded. “Large RIA firms that are nimble, adaptive and future-focused can manage the secular changes that are disrupting the industry and emerge in a stronger position. Periods of consolidation and buying growth always yield winners and losers, but a fundamentally transformed industry landscape is something much more challenging.”
For nearly two dozen thoughts on the future of RIAs from financial advisors and industry executives, scroll down the slideshow. To read a deep dive into the numbers on advisors changing firms and the many factors driving those decisions, click here. And, for J.D. Power’s latest ranking of the top firms in wealth management for investor satisfaction, follow this link.
Note: All of the anonymous quotes below come from a May 2025 report by the New England Consulting Group called “The Future of the RIA Industry.” Between April 2024 and January 2025, interviewers spoke with 36 advisors and eight executives “representing a cross-section of RIA corporate ownership structures” including independent firms, brokerage-affiliated teams, private equity-backed companies and bank-based wealth management programs.
