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4 Things To Evaluate Before Joining An RIA
These four key qualities in an RIA firm can help advisors determine if it’ s set up for success. By Rich Bursek
THE MIGRATION OF ADVISORS FROM BIG BANKS and wirehouses to RIAs continues to accelerate. Between 2012 and 2022, the four major wirehouses experienced a 10 % decrease in financial advisor head count. During the same period, the RIA sector saw a 66 % increase.
It’ s no wonder more advisors are shifting to RIAs— independence promises greater freedom, better economics and better alignment with clients.
But advisors who make the leap often find“ the grass isn’ t always greener.” The reality is that not all RIAs are created equal. And with private equity reshaping the landscape and more than 15,000 RIAs now in operation, choosing the right firm has never been more complicated or consequential.
How can you tell if an RIA will set you up for success? Here are the four key qualities advisors should evaluate before signing on the dotted line.
Private Equity Investment Comes With Strings Attached
To say that private equity money has flooded the RIA space would be an understatement. According to Fidelity’ s recent M & A report, private equity backed a record-breaking 89 % of RIA deals in 2024. Consider that just a short time ago, in 2016, private equity firms financed only 43 % of RIA acquisitions.
While this influx of capital may sound promising, it comes with strings attached.
Advisors who join RIAs hoping to build their book and operate with greater autonomy may instead face pressure to hit aggressive growth targets on the three-to-five-year“ shot clock” that private equity firms typically follow, after which the firms seek to liquidate their investments through minority or majority sales, through mergers or recapitalizations, any of which can lead to new management, new control, and significant disruption to both the way advisors do business and the end clients’ experience.
34 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER 2025 WWW. FA-MAG. COM