The wealth industry experienced a minor decrease in dealmaking activity in 2023, witnessing 321 announced transactions, which fell just short of the all-time high of 341 set in 2022. Despite this, the average assets per deal rose by 2.8% to $1.7 billion, propelled by a significant 24.2% surge in the S&P 500. Private equity firms played a prominent role in the consolidation of the wealth industry, with strategic acquirers dominating the majority of deals. Registered investment advisors (RIAs) continued to assert themselves in the mergers and acquisitions landscape, accounting for 71.3% of all transactions, with the total assets under management (AUM) among RIAs involved in deals experiencing a substantial 23.8% surge. Notable transactions included Carlyle’s acquisition of a minority stake in Captrust, UBS’s takeover of Credit Suisse, and Genstar Capital’s reinvestment in Cetera. Although the broker-dealer/hybrid buyer category experienced a modest increase, the transacted assets witnessed a significant decline, albeit the number of large-scale deals within the segment remained steady. Looking ahead, Echelon anticipates sustained robust activity driven by the ongoing necessity for advisor succession plans and the pursuit of growth through scale, amidst other market catalysts.

In the upcoming year, the wealth industry is poised for further evolution, characterized by a highly fragmented market, promising growth prospects, and a plentiful supply of motivated buyers and sellers in 2024. The prevailing dynamics suggest that the vigorous pace of activity observed in recent times is likely to persist. The collision of factors such as the demand for advisor succession plans and the pursuit of growth through scale is expected to continue driving market momentum. Amidst this backdrop, the industry remains ripe for strategic initiatives and transformative transactions as firms seek to capitalize on emerging opportunities and navigate evolving market conditions. With ample liquidity and a conducive environment for dealmaking, stakeholders across the wealth industry are poised to capitalize on the potential for growth and value creation in the year ahead.