Change is a constant in the world of financial advice. For many wealth management firms, particularly independent RIAs, mergers and acquisitions (M&A) have emerged as a defining strategy to unlock growth, ensure succession, and secure long-term value for clients and shareholders alike.
Whether you’re looking to retire, expand your platform, or find a partner who shares your values, an M&A transaction is one of the most important business decisions you will ever make. And yet, it’s also one of the most complex.
At InCap Group, we specialize in helping RIA founders navigate this journey—from initial planning to post-closing integration. This article offers a high-level overview of the M&A process, customized for wealth management firms. For deeper insights, we invite you to explore our five-part M&A blog series, which breaks down each phase in detail:
- “Crafting the Story” (Confidential Information Memorandum – CIM)
- “Discovering the Optimal Buyer” (Target List Development)
- “Negotiating the Deal and Structure” (Letter of Intent – LOI)
- “Sealing the Deal” (Definitive Agreements)
- “Getting to Close” (Closing the Deal)
What Drives M&A in Wealth Management?
The wealth management industry is undergoing rapid consolidation. Here are the key reasons why RIA owners explore a transaction:
- Succession Planning: Many RIA founders have built great businesses but lack a clear internal successor.
- Operational Scale: Joining a larger platform provides leverage across compliance, technology, and operations.
- Enhanced Client Offerings: Acquirers often bring estate planning, tax services, and other capabilities that deepen the client relationship.
- Talent Access: M&A can attract next-gen advisors and operational leadership.
- Monetization of Equity: For owners, a sale allows the realization of the value built over decades—often at premium multiples.
Understanding the RIA M&A Process
1. Pre-Deal Phase
This phase is all about preparation and positioning.
- Strategic Goal Setting: Define what a successful transaction looks like—full exit, partial sale, staying involved, etc.
- Firm Valuation: Based on AUM, revenue, growth rate, EBITDA, and client demographics.
- Crafting the Story (confidential information memorandum): A compelling confidential information memorandum or CIM markets your firm to prospective buyers. It highlights your value proposition, culture, and future potential.
➤ See Part 1: “Crafting the Story” - Discovering the Optimal Buyer: A well-curated buyer list ensures alignment not only on price but also on culture, structure, and strategic vision.
➤ See Part 2: “Discovering the Optimal Buyer”
2. Deal Execution Phase
Once buyer conversations begin, structure becomes critical.
- Management Meetings: You’ll meet with selected buyers to assess fit, values, and capabilities.
- Negotiating the Deal (LOI): This non-binding document sets the framework for valuation, deal structure, payment terms, earnouts, and employment agreements.
➤ See Part 3: “Negotiating the Deal and Structure” - Due Diligence: Acquirers will examine everything—clients, compliance, operations, contracts, and financials.
- Sealing the Deal (Definitive Agreements): Lawyers finalize the APA/MIPA, employment contracts, equity rollover documents, and other legal agreements.
➤ See Part 4: “Sealing the Deal”
3. Post-Signing and Closing Phase
Execution matters just as much as negotiation.
- Getting to Close: Includes client consent processes, regulatory filings, and operational integration planning.
➤ See Part 5: “Getting to Close” - Client Consent: Unique to RIAs, you must obtain written consent from clients before assets can transfer. Poor communication here can jeopardize deal value.
- Integration: Technology, custodians, team alignment, and cultural transition all play a role in post-close success.
- Realizing Value: Earnouts and retention agreements often hinge on post-close performance, so alignment is essential.
Contact InCap Group
At InCap Group, we provide specialized M&A advisory exclusively for wealth management firms, RIAs, and asset managers. We understand the regulatory nuances, emotional dynamics, and operational challenges that define this industry.
We’ve worked with firms ranging from $100M to over $5B in AUM—and we partner with top-tier legal and tax experts to ensure a seamless, high-value outcome.
Whether you’re preparing for a sale, evaluating offers, or just beginning to consider your options, our experience and process-driven approach ensure your goals remain front and center.