Trends Shaping Financial Services M&A in 2025: What Advisors Need to Know

The M&A landscape in financial services isn’t slowing down. It’s evolving. Fast.

As of mid-2025, deal values in the sector have surged by 15% year-over-year, even as total deal volume declined slightly. Buyers are shifting focus from quantity to quality, prioritizing scalable, tech-forward firms with clear succession plans (PwC).

For financial advisors, this signals a critical inflection point. Whether you’re looking to grow, merge, or eventually exit, your firm is already being measured by acquirers, partners, and the competition. The question isn’t whether M&A will impact your practice. It’s whether you’re positioned to benefit from it or be left behind by firms that are.

In this article, we’ll break down the major M&A trends shaping the financial services sector in 2025 and explain what they mean for advisors ready to take the next step.

Market Overview: M&A Activity Across the Financial Services Sector

M&A activity across the financial services sector continues to evolve, not decline. While the number of transactions has dipped slightly in the first half of 2025 compared to 2024, overall deal value has increased, pointing to a market focused on quality over quantity. Advisory firms with clear growth strategies, strong tech foundations, and exit readiness are driving most of the acquisition interest.

Consolidation Is Leading the Charge

The wealth management industry is seeing a wave of consolidation. Larger firms are absorbing smaller competitors to gain scale, cut costs, and expand into adjacent services. This isn’t a short-term trend. It’s a shift in how advisory services are structured for the next decade.

Key M&A Drivers in 2025 and Beyond

1. Demographics: The aging advisor population remains a primary force behind succession-focused M&A transactions. Firms with no clear exit plan are becoming acquisition targets—whether they want to be or not.
2. Valuations: Multiples remain high, especially for mid-sized firms with recurring revenue and clean books. In some deals announced in Q2 2025, buyers paid premiums of 20–30% over 2024 valuations to secure strong regional players.
3. Private Equity Activity: Private equity firms are still heavily active in 2025, especially in platforms with scalable back-end infrastructure. Their presence has increased deal complexity, but also driven up firm values for sellers who meet investor criteria.
4. Cross-Border Activity: With more regulatory alignment across markets, cross-border acquisitions are becoming more common. Firms with international client bases or dual-licensed capabilities are seeing increased interest from global buyers.
5. Buyer Types: The buyer landscape has shifted. RIAs, aggregators, and PE-backed consolidators dominate the deal flow, often outbidding traditional regional banks and wirehouses.

The Takeaway for Advisors

This is not just a surge in M&A activity. It’s a strategic reshaping of the financial institution space. Advisors who understand the evolving M&A environment, from valuation levers to buyer preferences, can position themselves for stronger outcomes. Those who don’t risk falling behind in an increasingly selective market.

Strategic Implications for Advisory Firms

As M&A trends reshape the financial sector, the impact on advisory firms depends on size, structure, and strategic readiness.

Solo Practices vs. Ensemble Firms

Solo advisors face increasing pressure to partner up. Without infrastructure or scale, they risk being overlooked by serious buyers. Joining networks or aligning with roll-up platforms can offer access to tech, compliance, and deal flow. Ensemble firms, with deeper teams and established systems, are far more attractive to private equity and aggregator platforms. Still, even small firms can compete by documenting recurring revenue, segmenting clients, and systematizing operations.

Valuation and Deal Structure Impacts

In 2025, valuation multiples hinge on tech, compliance, and revenue quality. Earn-outs are common. After all, buyers want performance, not just promises. Advisors should model multiple scenarios (full sale vs. equity rollover) to understand real outcomes.

Rising interest rates and tighter credit could lower multiples by year-end. Waiting might cost more than you think, especially as capital becomes more expensive for buyers.

Opportunities and Risks to Watch

Firms with strong infrastructure and retention will command premiums. Niche expertise is another edge in a crowded M&A market. But advisors who delay readiness, ignore tech gaps, or fail to clean up compliance risk become undesirable assets. With more deals announced each quarter and a potential uptick in activity expected before tax changes in late 2025, now is the window to act or fall behind.

What Advisors Should Do Now to Prepare

The M&A window is open but narrowing. As market volatility looms in the second half of 2025, firms that prepare now will capture better terms and stronger outcomes.

Is Your Firm M&A-Ready?

Before you talk to a buyer, get real about your deal readiness:

1. Is your succession plan documented and executable?
2. Are your financials, compliance files, and client data audit-ready?
3. Do you know your current valuation based on announced deals in Q2 2025?

If the answer to any of these is “no” or “not sure,” you’ve got work to do.

How to Boost Your Attractiveness

Top-tier firms stand out not just by size, but by operational discipline. Clean data. Scalable tech. Locked-in talent. If you're still running outdated systems or lack a reporting structure, expect a discount.

Start now: Invest in infrastructure, formalize your processes, and build buyer relationships early, even if you’re not planning to sell this year. For a deeper breakdown, explore our guide to selling a financial advisory practice.

Match Strategy to Market Reality

Whether you’re eyeing a minority investment, a merger, or a full exit, your structure should match your goals. Not every deal means stepping away. Many buyers are open to shared control and phased transitions. Today’s M&A strategies are flexible, but have no patience for unprepared sellers. Firms that are tech-forward, risk-managed, and succession-ready, those aligned with 2025’s most sought-after deal criteria, will control the negotiation.

The Advantage Now Belongs to Advisors Who Plan Ahead

The second half of 2025 will test which firms have truly prepared for today’s M&A environment. As consolidation accelerates and M&A across the financial sector favors scale, tech, and succession-readiness, reactive firms will lose ground.

Advisors who invest in readiness with clean books, strong processes, and clear goals will command stronger valuations and attract better partners. Those who delay will face a more selective buyer pool and shrinking leverage as M&A momentum shifts toward premium-ready firms.

If a sale is even on your radar in the next 18–24 months, now is the time to prepare. Don’t wait for the market to decide your firm’s value, partner with Advisor Legacy to shape it on your terms. Start your practice sale conversation today with the M&A team trusted by growth-focused financial advisors nationwide.