Financial advisors’ desire for bigger and better technology platforms helped fuel merger and acquisition activity last year, according to a report by Berkshire Global Advisors, an investment bank.
The report said that in 2024, the number of deals involving RIAs overseeing at least $100 million in assets under management (AUM) hit a record 269 transactions, just above the previous year.
The firm said one factor driving the deals was the sellers’ desire to access larger, more expansive technology platforms, noting that acquiring a tech stack is much cheaper than building one from scratch.
“Sellers realize it’s easier to join a bigger enterprise with a first-rate tech offering than to build a tech stack themselves,” the report said. “But beyond a better tech experience, a scaled platform also offers advisors another big advantage: an in-house IT department with dedicated experts.”
The report comes as RIAs are increasingly relying on technology to help boost organic growth. Many within the industry are hopeful that the ongoing artificial intelligence boom will eventually identify operational efficiencies within firms and help them take advantage of untapped growth opportunities, including those related to client referrals and asset consolidation.
Buyers were also seeking to acquire firms so they could expand the number of services beyond financial advice that high-net-worth individuals have been increasingly demanding, including OCIO, tax planning and preparation, and trust and estate planning services.
The report predicts 2025 will be another strong year for M&A. The Federal Reserve will likely cut interest rates further, making it cheaper for buyers to acquire capital. The new Trump Administration’s economic platform—cutting taxes and regulations—will also likely boost activity, the firm believes.
