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The financial advisory industry is on the brink of a significant transformation due to the impending retirement of a large number of financial advisors. This looming wave of retirements, combined with the lack of clear succession plans, is fueling a surge in mergers and acquisitions (M&A).
The Aging Advisor Workforce & Succession Crisis
The U.S. financial advisory industry is facing a demographic challenge. The average age of a financial advisor is 56, with an estimated 37% of advisors controlling over $10.4 trillion in assets, preparing to retire in the next decade. This creates an urgent need for comprehensive succession plans to ensure a seamless transition of client relationships and assets.
Despite this, a staggering 40% of financial advisors lack a succession plan, according to a recent FA-IQ survey. This absence of internal plans is a primary driver behind the significant surge in M&A activity within the sector, as advisors without a successor are forced to consider selling their practices.
The Rise of RIA M&A
M&A activity among RIAs has seen a significant increase. Between January and June of 2025, RIA M&A transactions reached a record high, with deals surging to 12.6 per month between January 2020 and March 2023, compared to 4.7 per month in the previous period. The size of these deals, measured by assets under management (AUM), has also grown remarkably.
Key Market Trends in 2025
- The Ascendance of Institutional Buyers: Large institutional buyers are playing a more pivotal role in acquiring books of business from retiring advisors.
- Challenges & Misconceptions: Many advisors struggle with the timing of their retirement and may have a misconception that the next generation of advisors must be fully prepared from day one. A more viable approach involves a gradual equity buy-in and a mentorship program.
- Valuation: Determining the value of a book of business can be a complex task, and while metrics like gross revenue and EBITDA are commonly used, many advisors are unfamiliar with the process.
AdvisorLaw: Your Strategic Partner in Succession Planning
In this era of monumental change, AdvisorLaw stands as a steadfast ally for financial advisors. Our team of seasoned experts has the knowledge and expertise to guide you through selling your practice and creating a robust succession plan. We offer personalized guidance and unwavering support to help you achieve a smooth transition into retirement or explore M&A opportunities.
Your book of business is one of your most valuable assets. We believe your exit strategy should both safeguard your clients' well-being and maximize your financial returns. Succession isn't just an event; it's a carefully planned process.
AdvisorLaw's services include:
- Complimentary Business Valuations: We provide an objective valuation of your practice to give you a clear understanding of its worth.
- Successor Sourcing: Our extensive network helps you find the right buyer or partner who meets your unique demands and expectations.
- Comprehensive Transaction Management: We handle every aspect of the transaction, from meticulous contract preparation to legal and regulatory compliance, ensuring a seamless process from start to finish.
By partnering with AdvisorLaw, you can navigate the complex waters of succession planning with confidence, so that your legacy endures and your clients are well cared for.
Engage with our experts today!