The wealth management industry is experiencing a shift in registered investment advisor (RIA) valuations, according to a recent survey by DeVoe & Company. After four years of record-high valuations, consolidators in the industry predict that RIA valuations will finally flatline in the latter half of 2026. This marks a notable change from 2025, when 8% of consolidators expected higher valuations. The survey, which surveyed over 100 RIA executives, found that 82% anticipate stable RIA valuations, 18% expect declines, and none expect increases. This shift in expectations suggests that the market is entering a new phase, with buyers becoming more measured in their pricing strategies. The current buyer pool yields an unusually wide range of valuation outcomes, with internal succession transactions anchoring the lower end, while strategic RIA acquirers pay materially more, and PE-backed consolidators typically pay the highest valuations. The transactions commanding high multiples, north of 20x, typically involve firms managing tens or hundreds of billions in assets, with exceptional growth, profitability, leadership teams, and strategic attributes. Brett Zaniewski, co-founder of investment bank and consultancy Decerno Advisors, agrees that valuations may have peaked but emphasizes that they are not down. He notes that buyers are using other levers to sweeten the pot, such as being flexible on cash/equity mix, granting equity to 2nd gen, and increasing earnouts. Larger RIAs will remain a top target amid the deal frenzy, with 46% of consolidators seeking firms between $1 billion and $5 billion in assets under management. However, there is an expectation gap between what buyers are willing to pay and what sellers expect them to pay. Nearly three-quarters of consolidators say the gap between what sellers expect and what buyers are willing to pay is widening, while just 9% believe the gap is narrowing. This disconnect stems partly from years of record transaction volume and headline-grabbing valuations that have shaped seller expectations, particularly the premium multiples private equity pays for RIAs. Despite a slowdown in the second quarter, the underlying drivers of RIA M&A haven't changed, according to DeVoe's CEO, David DeVoe. He expects transaction activity to remain historically strong. Jim Gold, the CEO of Steward Partners, believes there is much more deal activity than is often reported by the various banks and consultancies because firms don't always release it. M&A consultants at Marshberry recently forecast that the wealth management sector is on track to top 400 deals in 2026, the most since it started tracking them in 2020. This prediction suggests that the industry is still very active, despite the slowdown in the second quarter. In conclusion, the wealth management industry is experiencing a shift in RIA valuations, with buyers becoming more measured in their pricing strategies. The industry is still very active, with a high number of deals expected in 2026. However, there is an expectation gap between what buyers are willing to pay and what sellers expect them to pay, which could lead to further negotiations and adjustments in the market.
