RIAs in for a Fight over Forthcoming Trillions
/Consolidation continues to rise in the RIA industry. Between M&A, smaller shops closing up, and older advisors retiring, a larger amount of assets are being managed by a more concentrated number of advisors.
And further consolidation means trillions of dollars up for grabs.
A study from Cerulli Associates found that continued industry consolidation could put $2.4 trillion in assets in play over the next decade. The study says that an aging adviser demographic will lead to more consolidation, particularly among small shops, though some took umbrage to that theory.
"It’s true most signs point to continued and increasing M&A activity in the RIA space, and that’s usually equated with consolidation,” said Colin Falls, president of GeoWealth, a financial technology and investment advisory firm. “But, from an independent advisor perspective, there’s more to it than that — technology is what made it possible for many independent RIAs to leave big firms in the first place. And it’s what will make it possible for them to fight this push for M&A-driven consolidation — because good tech provides scale at a micro level."
Between the retiring of the “old guard” of advisors and the rise of digital self-service technologies, it’s clear the RIA industry is going through a transformative time.