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 Eccleston Law 

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.

 

Eccleston Law 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

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

December 2, 2025
Crypto's Leverage Shakeout Exposes Structural Risks

The crypto market’s recent downturn erased nearly $20 billion in leveraged positions within hours and half a trillion dollars in market value over a single weekend.

December 1, 2025
UBS Winds Down Funds as First Brands Bankruptcy Ripples Through Global Markets

UBS Group AG has begun liquidating two invoice finance funds with direct exposure to First Brands Group, marking one of the earliest moves by a major financial institution to contain the fallout from the bankrupt auto-parts supplier’s collapse, as reported by Bloomberg Law.

November 26, 2025
Former GWG Chair Charged in Alleged $150 Million Fraud Scheme as Investor Losses Mount

Federal prosecutors have intensified scrutiny of the long-running collapse of GWG Holdings Inc., unveiling criminal charges against Bradley Heppner, the former chair of both GWG and Beneficient.