Tr?id=566623520170033&ev=PageView&noscript=1

ÍøÆØ³Ô¹Ï

Fidelity Study Finds Rise in RIA Valuations Reaches Plateau

Posted on June 28th, 2023 at 3:43 PM
Fidelity Study Finds Rise in RIA Valuations Reaches Plateau

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï 

According to a recent study conducted by Fidelity Investments, the financial industry expects a continued rise in registered investment advisor (RIA) dealmaking over the next five years, despite the increasing cost of acquiring RIA firms.

Owners of RIAs are now demanding higher prices for their firms compared to the period between 2017 and 2019, according to InvestmentNews. Fidelity's study found that the commonly used valuation metric, EBITDA (earnings before interest, tax, depreciation, and amortization), has increased multiples for RIA transactions. Previously, RIA firms were typically valued at around eight times EBITDA, but in the current market, higher multiples are being observed.

Fidelity attributes this rise in the EBITDA multiple to factors such as strong organic growth, young and ambitious next-generation leaders, and a significant presence in key geographic areas. While the price has increased by 200 percent, multiples for high-quality firms are stabilizing.

RIA firms that lack a leadership succession plan or strong management team or rely heavily on a single large client are likely to receive lower offers during the sale process, according to Laura Delaney, Fidelity's vice president of practice management and consulting. Currently, the most valuable type of RIA firm possesses a strong management team, a culture of business development, and a focus on incorporating the next generation of investors into their client base.

 

ÍøÆØ³Ô¹Ï LLC represents investors, investment advisers, and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

 

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Jim, Stephany and the whole team were a God send.  ÍøÆØ³Ô¹Ï felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

Greg P.

LATEST NEWS AND ARTICLES

1783615970 Law
July 9, 2026
FINRA Suspends Former Branch Manager for Supervisory Failures Linked to Excessive Trading and Churning

A former regional branch manager at a broker-dealer has agreed to Financial Industry Regulatory Authority (FINRA) sanctions after the regulator found that he failed to supervise registered representatives who engaged in excessive trading and churning of customer accounts.

1783525964 Law
July 8, 2026
SEC Sanctions David Lerner Associates for Regulation Best Interest Violations

David Lerner Associates has agreed to settle Securities and Exchange (SEC) charges alleging violations of Regulation Best Interest (Reg BI) that resulted in unnecessary costs to retail investors, according to InvestmentNews.

1783434190 Law
July 7, 2026
Private Credit Funds Face Mounting Redemption Pressure as Investor Sentiment Shifts

A surge in investor redemption requests has intensified pressure on private credit funds, raising concerns about liquidity and long-term stability across the asset class, as reported by The Wall Street Journal.