IN-DEPTH ARTICLE OF THE WEEK

This week, we’re digging into what makes an RIA valuable and where valuations are headed as the landscape shifts. The industry’s evolved fast. Firms with $2-5 billion in AUM, once big players, are now tuck-ins for giants like Corient or Creative Planning. Platforms pursued by Bain Capital or TPG can hit premium multiples, well north of 15x EBITDA. But with a new bearish rate cycle and buyers turning selective, the game’s changing.

Here’s why you’ll want to read it:

• Must-have drivers. Organic growth (8-10% for top firms), smart margins (25-35%), and next-gen talent boost value, whether you’re selling, taking capital, or staying solo.

• Tuck-ins vs. platforms. Tuck-ins need fit and efficiency to shine. Platforms need scale and tech to dominate. A table breaks it down.

• Where I see it going. I’m betting $2-25 billion platforms remain the sweet spot for top valuation multiples. Valuations for smaller firms and the largest aggregator firms will adjust lower but still above historical norms.

• Key warning. Hoarding cash flow over investing in talent could tank your long-term worth.

Want to position your firm for today’s deals or tomorrow’s shifts? Click through. This is your roadmap to building an RIA that stands out and lasts.

WORTHWHILE INDUSTRY NEWS

• Three-Fourths of Advisors to be Fee-Based by 2026: Cerulli

  Ironically, the RIA space is the only channel to see fee-based revenue actually drop as a percentage due to the rise of fixed financial planning fees and retainer fee models. Link

• Piper Sandler: # of Sponsor-Backed RIA Platforms Rose to 50 in 2024

  Chris Browne predicts a relentless surge in sponsors hunting for RIA platforms, eager to invest in emerging firms or expand existing ones, with ample opportunity remaining for consolidating smaller deals. Link

• Former Allianz Exec Launches Advanced Planning Firm

  I expect to see more specialized planning and advisory firms like Heather Kelly’s Mosaic Advanced Planning emerge, offering smaller RIAs scalable expertise and resources in risk management, insurance integration, and other planning areas to enhance client services without the need to build costly in-house teams. Link

• Charles River, iCapital Team up for Innovative UMA Solution

  The new unified managed account solution from State Street’s Charles River and iCapital empowers advisors to seamlessly manage both public and private assets within a single account as alts exposure increases. Link

• Hamilton Lane calls for a private equity performance reckoning

  Hamilton Lane’s 2025 market overview urges PE managers to address recent underperformance compared to public markets, while predicting evergreen funds will grow to 20% of the asset class in a decade, with early data showing they slightly outperform closed-end funds over 5 years. Link

• 3 Holistic Planning Trends Reshaping the Industry - Research Findings

  Research from Cerulli and CEG Insights highlights a shift to holistic planning, with team-based models, specialized certifications, diverse fee structures (up 12% since 2020), and model portfolios (39% of AUM) driving advisors to meet complex client needs beyond traditional investment management. Link

CURATED INSIGHTS & PERSPECTIVES

In a recent Barron’s Advisor interview, Karl Heckenberg, head of Constellation Wealth Capital, shared what draws his private-equity firm to independent RIAs and what fuels their success. With $1 billion to invest, his perspective offers practical lessons for RIA leaders looking to scale effectively.

Key takeaways for RIA leaders and teams:

• Equity as a Team Sport: Top firms share ownership beyond the C-suite, building accountability and long-term strength. Heckenberg highlights this as critical for succession that preserves independence.

• Know Your Niche: Success comes from targeting a specific client type, like FedEx pilots or ultra-high-net-worth families, and crafting a standout service model. Focus wins over broad reach.

• Listen More, Sell Less: Heckenberg credits his Midwest roots for prioritizing listening over pitching, unlike typical PE approaches. For RIAs, tuning into client and team needs can drive smarter growth.

• AI as Leverage, Not Replacement: He views AI as a tool to streamline operations, such as account openings and rebalancing, letting advisors focus on client trust, where 92% of clients value their advisor over institutions.

• Talent Hunt Challenges: Like RIAs, Constellation struggles to find skilled talent familiar with the space. His solution? Invest heavily in training to address the advisor shortage.

Heckenberg’s approach, backing firms like Bogart Wealth with minority stakes, reflects a partnership mindset focused on mutual growth, not just exits. For RIA leaders, it’s a call to align equity, refine focus, and prioritize people to excel in a crowded market.

OUR QUICK TAKE

This really resonated with me hearing Karl’s backstory and why he’s become successful in this space. Of course he’s from the Midwest, which ties to why he says he’s thrived—he listens twice as much. Lots of solid advice here, but what stood out was how they target firms that know who they are, with a sharp focus on delivering for their niche market with a clear strategy. I think this will be a bigger focus for all firms moving forward as they aim to stand out beyond the now table-stakes holistic planning pitch most use to claim they’re different.

In a recent analysis by Matthew R. Crow, CFA, ASA, CEO of Mercer Capital, the tradeoff between growth and margin takes center stage for RIAs aiming to boost value. Likening it to racing’s speed-versus-handling dilemma, Crow argues that mastering both drives the highest valuations. Here’s what RIA leaders need to know to optimize their firm’s engine.

Key insights for RIA leaders and teams:

• Balance Is Power: A solid RIA combines healthy margins (20% to 30% EBITDA common) with steady growth (5% to 10% annually). Aiming for a combined score near 40% signals a standout model.

• Margin Fuels Options: Higher margins, like 30% or more in disciplined ensembles, give you cash to reward talent or fund growth. Skimp here, and you risk stalling future gains.

• Growth Takes Effort: Beyond market tailwinds (around 5% from a 60/40 portfolio), double-digit AUM growth demands active business development. Referrals help, but proven outreach is the real accelerator.

• Invest or Stagnate: Plowing profits into recruiting, training, or next-gen services pays off more than hoarding cash. Spending on growth can lift value faster than margin hikes alone.

• Measure the Payoff: A 30% margin with 10% growth can push valuations to 3.3x revenue, outpacing a 25% margin at 7.5% growth (2.5x revenue). Numbers show both matter.

For RIA leaders, Crow’s takeaway is clear: don’t choose between growth and margin. Build a firm that delivers both, like a Formula 1 car tuned for speed and agility, to maximize value and stay ahead of the pack.

OUR QUICK TAKE

Perfect timing on this article that syncs with my in-depth piece this week—and I promise I didn’t peek at this before writing mine. Matt nails it as usual, breaking down the balance between profit margin and growth and how it shapes valuations. Be sure to click through for an awesome table showing how different margins and organic growth rates drive firm value. Love how he ties it to the software world’s Rule of 40, where a business is strong if profit margin plus revenue growth tops 40—such a smart analogy for RIAs.

Bleakley Financial Group, minority backed by Joe Duran’s Rise Growth Partners since August 2024, is charging toward national RIA status. Diana Britton details how this $11 billion hybrid RIA is evolving with Rise’s support. Here’s what RIA leaders can glean from Bleakley’s playbook.

Key insights for RIA leaders and teams:

• Equity Unlocks Alignment: Bleakley’s new equity partnership program flipped 80% of its AUM and 75% of advisors from 1099 to W-2 status, offering a mix of equity and cash based on individual production, plus a retirement payout, tying advisor success to firm success.

• Growth Through M&A: With Rise’s backing, Bleakley acquired two RIA firms in Q1 2025, adding $1 billion in assets. This signals a scalable inorganic growth model for firms eyeing expansion.

• Leadership Matters: Bleakley hired new chief growth officer, with Rise aiding the vetting process. His role in acquisitions and advisor integration underscores the value of strategic hires to sustain momentum.

• Client Input Shapes Identity: A client survey conducted by Rise is driving Bleakley’s upcoming rebrand, set to debut soon with a memorable name and logo. Listening to clients can refine your firm’s edge.

• Team Governance Boosts Buy-In: Rise helped establish a governance structure and Advisor Council, letting advisors shape the client experience and platform. Collaborative input can strengthen culture and offerings.

Bleakley’s CEO Andy Schwartz sees this as enriching all stakeholders, not just the top tier. For RIA leaders, it’s a lesson in leveraging capital and expertise to scale fast while keeping advisors and clients at the core. Curious about Rise’s next steps? Check out Citywire’s take on Duran’s plans.

OUR QUICK TAKE

When I first read this, I was blown away by how fast Rise helped Bleakley implement changes to boost future growth and improve their operating model in such a short time. These moves—like the 1099-to-W2 shift, which gets everyone on the same bus—really stand out for building a firm with strong enterprise value. As I noted in my article, I’m very bullish on groups like Rise and Constellation Wealth Capital, which we featured in the Karl Heckenberg piece linked above.

In Season 2 of RIA+, host Mark Bruno, Managing Director at Emigrant Partners, chats with Sam Lewis, founder of Fruitful, about serving next-gen investors. Here’s what RIA leaders can learn from this innovative fintech’s rise.

Key insights for RIA leaders and teams:

• Membership Model Breaks Barriers: Fruitful’s $98/month membership delivers CFP-led advice, tailored portfolios, and high-yield cash accounts with no AUM fees, making planning accessible for 20s-to-40s clients.

• Human-Tech Blend Wins Trust: With guides chosen by members and an app automating data and roadmaps, Fruitful balances personal touch with scalable tech, easing financial stress for its thousands of members.

• Actionable Advice Closes Gaps: Fruitful links advice to action via spending and saving tools, like 5% cashback and automated accounts, turning plans into results for busy professionals averaging $100k in income.

• Next-Gen Needs Evolve: Lewis notes younger investors crave simplicity and trust over complex jargon, seeking help for big decisions (student loans, homebuying) rather than latte-budget lectures.

• Massive Market Awaits: Millions lack a fit with traditional RIAs due to high minimums or outdated delivery. Fruitful’s rapid growth since 2023 (with $40M raised) taps this unmet demand.

Fruitful’s bold moves—transparent pricing, guide videos, and a financial home app—show how RIAs can rewire advice for a generation overwhelmed by noise. A must-listen for adapting to tomorrow’s clients.

OUR QUICK TAKE

Thought this was a great listen for understanding how firms targeting the mass affluent, especially HENRYs (high earners, not rich yet), are attracting this demographic. I believe it’s more crucial than ever to build a pipeline of younger clients who may not fit your core focus, as they’re your future growth. With the high-net-worth market getting increasingly competitive, it’s time for more firms to see HENRYs as worth the investment, knowing they’ll pay off down the road.

SOLUTION SPOTLIGHT OF THE WEEK

MileMarker is a data management platform built to unify and streamline operations for wealth management firms, designed specifically for RIAs looking to scale into enterprises. It connects data from portfolio accounting, CRM, and planning tools into one hub, making it a strong fit for firms aiming to master their data. It’s not cheap, but it’s tailored for ambitious RIAs ready to grow big.

I haven’t used MileMarker myself, but I got a demo a few months back while investigating data warehousing solutions for the space. I also met Jud Mackrill, the founder, at Orion Ascent. He’s a great guy, for what it’s worth, and I’d already been a big fan of their work before meeting him, so it was super cool. It centralizes everything, cuts manual work, and preps you for AI-driven insights, though it takes effort to set up right. It delivers as promised. I think it’s a real asset for RIAs with complex data and enterprise goals, helping them work on the business. It’s only useful if your team fully commits. If not, it might not stick. Does it fail? Only if you don’t go all in.

Why consider it?

• Centralized data for better control

• Automated workflows to save time

• Insights from analytics-ready data

• Future-proofing for AI and scale

UPCOMING INDUSTRY LIVE EVENTS

• RIA Edge Nashville 2025 – April 1–2, 2025 – Nashville, TN
  Focus: Growth strategies, M&A, tech, and scaling for RIA leaders.

• Envestnet Elevate 2025 – April 9–10 – Las Vegas, NV
  Focus: Envestnet platform updates, digital tools, and investment solutions.

• Barron’s Advisor Teams Summit 2025 – April 9–11 – Los Angeles, CA
  Focus: Leadership, teamwork, and high-performing practice strategies.

• Invest In Women Conference 2025 – April 21–23 – Boston, MA
  Focus: Women in wealth leadership, career growth, and DEI initiatives.

• CFA Institute LIVE 2025 – May 4–7 – Chicago, IL
  Focus: Global markets, investment trends, and research insights.

• DeVoe & Company Elevate Summit 2025 – May 7–9 – Nashville, TN
  Focus: Succession, M&A, and strategic growth for RIAs.

• NAPFA Spring 2025 National Conference – May 7–10 – Phoenix, AZ
  Focus: Fiduciary planning, compliance, and fee-only practice insights.

• Citywire RIA CIO Summit – Nashville 2025 – May 8–9 – Nashville, TN
  Focus: CIO-only event on investment models, research, portfolio strategy.

• Future Proof Retreat 2025 – May 12–15 – Colorado Springs, CO
  Focus: Invite-only strategic offsite for next-gen advisors and innovators.

• BNY Mellon Pershing INSITE 2025 – June 3–5 – National Harbor, MD
  Focus: Custody, clearing, tech innovation, and advisor growth tools.

• Wealth Management EDGE 2025 – June 10–12 – Boca Raton, FL
  Focus: Combines Inside ETFs, WealthStack, RIA Edge for full-firm strategy.

• Morningstar Investment Conference 2025 – June 25–26 – Chicago, IL
  Focus: Investment research, portfolio construction, and market outlooks.

• ECHELON Partners Dealmakers Summit 25 – Aug 27–28 – Dana Point, CA
  Focus: RIA M&A, valuations, and trends in advisor dealmaking.

• NAPFA Fall 25 National Conference – September 3–6 – Washington, D.C.
  Focus: Advanced planning, tax strategies, and fiduciary firm building.

• Future Proof Festival 2025 – September 7–10 – Huntington Beach, CA
  Focus: Massive outdoor event for wealth, fintech, and asset managers.

• Barron’s Advisor Top 100 Summit 2025 – Sept 8–10 – Scottsdale, AZ
  Focus: Best practices for elite firms serving ultra-HNW clients.

• XYPN LIVE 2025 – September 25–27 – Austin, TX
  Focus: Fee-only planning, tech tools, and Gen X/Y client strategies.

• RIA Edge West 2025 – October 7–8 – Marina del Rey, CA
  Focus: Organic growth, advisor recruitment, and M&A execution.

• CAIS Alts Investment Summit 2025 – Oct 13–16 – Beverly Hills, CA
  Focus: Alts access, manager due diligence, and platform solutions.

• FPA Annual Conference 2025 – November 3–5 – Las Vegas, NV
  Focus: Financial planning excellence, community, and client value.

• Schwab IMPACT 2025 – November 19–21 – San Francisco, CA
  Focus: Schwab platform updates, growth tools, and thought leadership.

• Barron’s Advisor Women Summit 2025 – December 3–5 – Palm Beach, FL
  Focus: Female advisor leadership, growth, and mentorship.

• MarketCounsel Summit 2025 – December 7–10 – Las Vegas, NV
  Focus: RIA legal, compliance, business strategy, and dealmaking.