July 2026
Executive Summary
The RIA acquisition market remains exceptionally active, but one trend is becoming increasingly clear: buyers are becoming more selective.
RIA transaction activity reached another record during the first half of 2026, with DeVoe & Company tracking 167 transactions. Although second-quarter activity declined approximately 20% from the unusually strong first quarter, the underlying acquisition market remains robust. Succession needs, abundant private capital, and consolidator demand continue to support transaction volume.
Valuation expectations, however, are becoming more disciplined.
In DeVoe’s latest survey of major RIA consolidators, 82% of respondents expected valuations to remain stable during the second half of 2026, while 18% anticipated a decline. No respondents expected valuations to increase.
This does not mean high-quality advisory firms are losing value. It means premium pricing is increasingly reserved for firms demonstrating sustainable organic growth, operational scale, recurring revenue, strong profitability, leadership depth, and institutional business models—not simply higher AUM.
For advisory firms planning to sell within the next five to ten years, enterprise value is increasingly determined by business quality rather than business size.
Practice Valuation Scoreboard
| Trend | Current Direction | BKLM View |
|---|---|---|
| Transaction Activity | ▲ Strong | First-half activity reached another record |
| Valuations | ► Stable | Premium firms can still command strong pricing |
| Private Equity Capital | ▲ Active | Capital remains plentiful and highly competitive |
| Organic Growth Importance | ▲ Increasing | One of the clearest valuation differentiators |
| Advisor Succession Demand | ▲ Increasing | Retirement and continuity needs remain major catalysts |
| Smaller Firm Premiums | ▼ Moderating | Buyers are applying greater pricing discipline |
What Buyers Are Paying For
This month’s industry research reveals five characteristics consistently driving premium valuations.
1. Organic Growth Is Now the Premium Multiple
Historically, increasing AUM often translated directly into higher valuations.
Today, buyers want to understand how that growth occurred.
A firm may report rising assets and revenue while producing relatively little true organic growth. Market appreciation can increase AUM, but it does not necessarily demonstrate that the business can consistently attract new clients.
Sophisticated buyers increasingly separate:
- Market-driven asset growth
- Assets acquired through transactions
- Assets transferred through advisor recruiting
- Net new assets generated organically
Firms consistently winning new client relationships, attracting outside assets, maintaining productive referral networks, and operating repeatable business-development systems remain positioned to command premium valuations.
Market appreciation alone is not viewed as a sustainable growth engine.
BKLM Take
If your revenue grows because markets rise, your valuation may not.
If your revenue grows because your business consistently wins new clients, your valuation likely improves.
The key valuation question is no longer simply, “How much did the firm grow?”
It is, “How much growth did the firm create?”
2. Scale Alone Isn’t Enough
Many advisory firms have successfully increased their size through acquisitions, advisor recruiting, and market appreciation.
However, buyers increasingly distinguish between firms that simply became larger and firms that became stronger.
The highest valuations are increasingly awarded to businesses that combine:
- Scalable operations
- Strong leadership teams
- Institutional client service
- Technology adoption
- Operational efficiency
- Consistent profitability
- Centralized management
- Documented business processes
First-quarter 2026 transaction data demonstrated that buyers still have substantial appetite for large organizations, with Echelon Partners reporting 142 transactions involving approximately $1.67 trillion in assets during the quarter.
But size without integration can create complexity rather than enterprise value.
A firm that adds advisors, offices, and assets without creating centralized operating systems may experience declining margins, inconsistent client experiences, fragmented technology, and excessive dependence on individual producers.
Simply adding advisors without improving operating leverage creates less value than many owners assume.
BKLM Take
A larger practice is not automatically a more valuable business.
Buyers pay premiums when scale produces stronger margins, better client service, deeper leadership, and greater growth capacity.
3. Succession Planning Continues Driving M&A
One of the largest long-term valuation drivers remains industry demographics.
Cerulli Associates estimates that more than 105,000 advisors—representing approximately 37% of industry headcount and more than 41% of industry assets—plan to retire over the next decade. More than one-quarter of those advisors remain unsure about their succession plans.
This creates a significant pipeline of potential:
- Practice acquisitions
- Internal successions
- Minority investments
- Strategic mergers
- Advisor transitions
- Continuity arrangements
The retirement wave should continue supporting acquisition demand, particularly for well-managed firms with durable client relationships and clearly documented succession plans.
However, demographic demand does not guarantee premium pricing for every seller.
A practice that waits until the founder is ready to retire may have fewer options than a firm that begins building leadership depth, transferable relationships, and operational continuity several years before a transaction.
BKLM Take
Succession creates demand, but preparation creates value.
The strongest transaction outcomes will generally belong to owners who begin institutionalizing their businesses well before they need to sell.
4. Valuation Expectations Are Becoming More Realistic
After several years of record pricing, buyer sentiment is becoming more disciplined.
DeVoe’s July 2026 consolidator survey found:
- 82% expect RIA valuations to remain stable.
- 18% expect valuations to decline.
- No major consolidators surveyed expect valuations to increase.
That represents a meaningful change from the previous year, when a small percentage of buyers still expected valuations to rise.
The change does not suggest that the acquisition market is weakening.
Buyers remain active, transaction pipelines remain substantial, and well-capitalized consolidators continue seeking acquisitions.
What is changing is the willingness to pay premium prices for average businesses.
Sellers sometimes base their expectations on highly publicized transactions involving multibillion-dollar firms, institutional platforms, exceptional growth rates, or strategically valuable geographic footprints. Those transactions may not provide realistic valuation comparisons for smaller, founder-dependent practices.
The widening gap between seller expectations and buyer underwriting may become one of the most important transaction issues during the second half of 2026.
BKLM Take
Headline multiples are not market averages.
Premium transactions usually involve premium businesses, strategic value, competitive bidding, or unusually attractive financial characteristics.
5. Enterprise Value Is Becoming Operational
Perhaps the biggest shift occurring across wealth management is philosophical.
Five years ago, many advisors built practices.
Today, buyers want businesses.
Increasingly important valuation factors include:
- Advisor succession depth
- Client retention
- Recurring revenue percentage
- Profit margins
- Compensation structure
- CRM utilization
- Compliance systems
- Standardized client experience
- Brand strength
- Management capabilities
- Transferability of client relationships
- Dependence on the founder
- Quality of financial reporting
Compensation structure is also receiving greater attention. According to FP Transitions, advisory firms may spend anywhere from 30% to 90% of gross revenue on compensation, making compensation design a significant factor in profitability, operating leverage, team retention, and transaction value.
A firm whose clients primarily identify with one founder may be highly profitable but difficult to transfer.
A firm with centralized systems, multiple relationship owners, documented workflows, and institutional branding is generally easier for a buyer to integrate and operate after a transaction.
These operational characteristics often separate average valuations from premium valuations.
BKLM Enterprise Value Insight
Many advisors still ask:
“What multiple is my practice worth?”
That question is becoming less useful when considered in isolation.
Sophisticated buyers increasingly ask:
- Can this business continue growing without the founder?
- Is client acquisition repeatable?
- Are client relationships transferable?
- Is revenue durable?
- Are margins sustainable?
- Is the next generation of leadership already in place?
- Can the firm scale efficiently?
- Are processes documented and consistently followed?
- Can the buyer retain the clients, employees, and revenue after closing?
The answers to those questions often have a greater impact on valuation than another $50 million of AUM.
Two firms with similar revenue and assets can receive materially different offers because one is a transferable enterprise and the other remains dependent on its founder.
Advisors seeking to maximize enterprise value should therefore focus less on reaching an arbitrary AUM target and more on reducing business risk.
Every documented process, shared client relationship, developed successor, recurring growth channel, and improvement in operating leverage makes the business easier to transfer—and potentially more valuable.
What We’re Watching
For the months ahead, BKLM will continue monitoring:
- Changes in RIA valuation expectations
- Private equity investment activity
- Minority investment trends
- Advisor succession transactions
- Buyer appetite by firm size
- Valuation premiums for high-growth firms
- Differences between strategic and financial buyers
- New transaction structures
- Earnout and contingent-payment trends
- Seller rollover-equity requirements
- The growing valuation gap between institutional firms and founder-dependent practices
BKLM Bottom Line
The era of “bigger is automatically better” appears to be ending.
RIA acquisition demand remains strong, but buyers are increasingly differentiating between firms that have accumulated assets and firms that have created transferable enterprise value.
Today’s highest valuations increasingly belong to advisory firms that combine recurring revenue, disciplined operations, organic growth, leadership depth, durable profitability, and transferable client relationships.
For advisory firm owners, building a more valuable business is becoming less about managing additional assets—and more about building an institution that can thrive beyond its founder.