How is an RIA valued: EBITDA multiple or revenue multiple?
Buyers of established RIAs generally price a firm as a multiple of its earnings before interest, taxes, depreciation and amortization (EBITDA). Before applying the multiple, the parties have to agree on the earnings base. Kitces notes that if a founder is not paid a market-rate salary, an acquirer will typically impute one, which lowers the earnings figure and therefore the price. One-time and discretionary expenses are also adjusted, producing what is usually called adjusted or normalized EBITDA.
Revenue multiples remain common shorthand, particularly for smaller practices, because revenue is easy to verify. A Kitces podcast episode noted that the familiar rule of thumb of two times revenue can in practice range from roughly one times to nearly three times depending on the firm. The weakness of a revenue multiple is that it treats high-margin and low-margin revenue the same way.
Mercer Capital, a valuation firm, explains that the two measures are linked: a revenue multiple is essentially the EBITDA multiple scaled by the firm's EBITDA margin. In a Mercer example, two firms with identical revenue but different cost structures ended up with revenue multiples that differed by a factor of three. Larger or more complex firms may also be valued with a discounted cash flow analysis alongside market multiples.
What are RIAs selling for?
Advisor Growth Strategies, an RIA consulting firm, reported a median valuation of 11.6 times EBITDA based on 60 transactions in 2025, a record for its data, according to WealthManagement.com. That was up from 11.0 times in 2024, 9.9 times in 2023 and 8.0 times in 2020, an increase of more than 40% since 2020.
A median hides a wide range. The highest multiples have generally gone to larger firms selling to private equity-backed consolidators, while smaller firms tend to trade below the median. Published multiples also come from different samples and methods, so figures from different firms should not be compared directly.
There are signs buyers see limited room for further increases. Financial Planning reported in 2026 that in DeVoe's second-quarter 2026 Deal Book, none of the consolidators surveyed expected sale prices to rise over the next six months, and 18% expected them to fall, up from 7% in 2025.
What drives a higher or lower multiple?
Size is one of the clearest factors. Larger firms tend to command higher multiples because they bring scale, deeper management teams and more diversified client bases.
Growth is another. Capital Group, in an article on how private equity investors value RIAs, said consistent organic growth (net of client attrition and excluding acquisitions and recruited advisors) has become one of the largest drivers of valuation multiples. Mercer Capital similarly lists high client retention, stable fee-based revenue, scalable operations and strong organic growth among the factors that support higher multiples. Recurring, fee-based revenue is valued more highly than commissions or one-time revenue because it is more predictable.
Client demographics matter. Mercer Capital says the age profile of a firm's clients is a key area of inquiry for many buyers: older client bases often hold more assets but tend to shrink as clients draw down their portfolios and wealth passes to heirs, while younger client bases support better growth prospects.
Key-person risk works in the other direction. When client relationships depend on one or two founders, a buyer faces the risk that clients leave when those founders step back. Capital Group lists a deep bench of next-generation advisors and leaders, which reduces key-person risk, among the qualities buyers look for. Advisor Growth Strategies' authors have also described broad equity ownership among advisors and staff as increasingly important in achieving a high valuation.
How are RIA deals structured and paid?
The headline multiple is rarely paid in full at closing. Kitces has written that sellers may receive 80% of the price at closing, and sometimes only 50% or 25% in cash, with the remainder tied to client retention, earnout targets and continued employment. Those terms can change what a seller actually receives as much as the multiple itself.
Equity rollover is a large part of many deals with consolidators: the seller takes part of the price as an ownership stake in the acquiring platform rather than in cash. Among Advisor Growth Strategies survey respondents, equity consideration averaged 29% of deal value in 2025, and buyers expected that share to reach 33% in 2026. The value of that equity depends on the acquirer's future performance and eventual sale.
Earnouts pay part of the price later if the business meets revenue, growth or retention targets after closing. Advisor Growth Strategies has described earnouts and performance-based structures as the norm, which puts pressure on sellers to keep growing after the deal. Kitces has also noted that tax treatment differs by component, since earnout payments can be taxed as ordinary income while certain sale proceeds may qualify for long-term capital gains treatment.
Seller notes, in which the buyer pays the seller over time, are most common in internal successions. Mercer Capital notes that an internal transfer to the next generation typically requires debt or seller financing, because junior partners are rarely able to buy a full stake at once. This guide is general information and not tax, legal or investment advice; sellers typically work with legal, tax and transaction advisers on structure.
Who buys RIAs?
The most active buyers are private equity-backed consolidators, often called aggregators or integrators, which acquire many firms and fold them into a larger platform. Fidelity data reported by The Daily Upside showed private equity was behind 86% of RIA transactions and 91% of purchased assets in the first half of 2025. DeVoe reported that the most active acquirer in 2025 was Wealth Enhancement Group, with 17 deals, and that a record 13 firms completed seven or more transactions.
Other RIAs are also buyers. Echelon Partners reported that RIAs were the acquirer in 343 of its 466 counted transactions in 2025, about 73.6%, according to InvestmentNews, with private equity firms the direct acquirer in 9.4%. Many of those RIA buyers are themselves backed by private equity; Echelon said financial sponsors were involved in about 75.8% of activity when sponsor-backed platforms are counted.
Minority-stake investors buy a noncontrolling share, letting founders take some money off the table while keeping control. DeVoe reported minority deals at 14% of RIA transactions through the third quarter of 2025, the highest share since 2020 and up from 8% in 2023, and later said minority capital was expanding into firms with under $2 billion in assets. Echelon Partners, by contrast, found minority investments fell to 16.2% of transactions among firms with $1 billion or more in assets in 2025, a 42.3% decrease from 2024.
The pool of buyers is concentrating. DeVoe reported 18% more sellers and 19% fewer buyers in 2025 than in 2024, and first-time buyers accounted for 8% of deals, the lowest share on record.
How active is the RIA M&A market?
Every major tracker recorded 2025 as a record year, though their counts differ because they measure different universes. DeVoe & Company counted 322 announced transactions involving RIAs with at least $100 million in assets, up 18% from 272 in 2024, and estimated that about $520 billion in assets changed hands.
Echelon Partners counted 466 wealth management transactions in its February 2026 report, up 27.3% from the prior year, using a broader definition. Deals involving firms with at least $1 billion in assets reached a record 185, up from 140 in 2024, according to WealthManagement.com.
Fidelity counted 276 completed RIA transactions in 2025 with $796.4 billion in purchased assets, compared with 233 deals and $669.8 billion in 2024. Activity remained high into 2026: DeVoe counted 93 deals in the first quarter of 2026, a 24% increase from a year earlier, according to Financial Planning.
How do valuation and succession planning connect?
For many owners, a sale is a succession plan. DeVoe has said it expects M&A to keep increasing over the next several years, driven in part by firms' difficulty arranging internal succession.
Rising valuations make internal transitions harder to finance. Mercer Capital notes that next-generation partners are rarely able or willing to buy a full stake within a few months, so internal deals typically rely on seller financing, outside debt or both. External debt can fund an internal deal without bringing in an outside equity partner, Mercer says.
The practical takeaway from the valuation data is that the factors buyers reward, such as organic growth, a younger client base, recurring revenue and a leadership bench beyond the founders, are also the ones that make an internal succession more workable.