3.6Industry

Wealth & Investment Management

Investment advisors, RIAs, private equity firms, hedge funds, and trust companies managing and growing assets for institutional and private clients.

9
Segments
38
Verticals

Overview

Wealth & Investment Management spans the firms that advise on and manage capital — registered investment advisors, securities brokerage and trading, private equity and venture capital, hedge funds, traditional asset management, retirement and pension management, trust and estate services, family offices, and alternatives-distribution platforms. It runs on recurring, asset-based fees.

The RIA wealth-management space is one of the most actively consolidated markets in finance, while alternative-asset managers (PE, credit, hedge) have scaled enormously. Fee compression in traditional asset management, the democratization of alternatives, and the relentless RIA roll-up are the defining dynamics.

Market snapshot

Market size
~$793B
Growth
~6.1%CAGR (2017–22, nominal)
FragmentationFragmentedEstimate

The capital-management economy — advising on and managing money for recurring, asset-based fees: RIAs, broker-dealers, PE and venture, hedge funds, and traditional asset managers. Revenue is management, advisory, and brokerage fees, not the trillions in AUM they're charged on. Federal firm counts haven't caught up to the 2022 code changes for the two largest segments — advisory and brokerage — so this total leads with revenue; the RIA roll-up is among the most active consolidation stories in all of finance.

NAICS 523150, 523160, 523210, 523910, 523940, 523991, 523999, 525910, 525920, 525990. U.S. Census Bureau — 2022 Economic Census.

Business model & economics

Revenue model

Asset-based management and advisory fees, plus performance fees

Key economics

Recurring revenue
High

recurring AUM-based fees

EBITDA margin
Strong

scalable fee-based asset-management economics

Capex intensity
Low

Characteristics

  • Recurring, asset-based fee economics.
  • RIA roll-up is the marquee wealth-management M&A.
  • Fee compression and alternatives democratization reshaping the field.

M&A deal context

Deal activityHigh

Who’s acquiring

  • RIA & wealth-management consolidators
  • Alternative-asset managers
  • PE-backed platforms

What’s driving deals

  • Relentless RIA consolidation.
  • Scaling of alternative-asset managers.
  • Fee compression driving scale and consolidation.

Segments in this industry

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