Markets lift RIA AUM, push EBITDA multiples to 11.6x

Assets managed by investment advisers registered with the Securities and Exchange Commission reached nearly $177 trillion in 2025, a 22% increase from the prior year, the industry association’s annual snapshot found. Reported client totals rose about 8% to roughly 73.7 million, while the count of SEC-registered advisory firms climbed 4% to 16,544.

Data for the first quarter showed 438 independent RIAs crossed key size thresholds: 271 topped $500 million in AUM and 167 exceeded $1 billion. Those totals more than tripled the number of firms that reached the same levels a year earlier.

Buyers commonly value advisory firms with multiples of adjusted EBITDA, and fee revenue is closely tied to assets under management. The Investment Adviser Association’s RIA Deal Room reported that the median valuation for RIAs sold last year rose to 11.6 times adjusted EBITDA, up from about 11 times in 2024.

Peter Nesvold, managing partner at Nesvold Capital Partners, described market-driven asset gains as a factor inflating firm size and valuations. “The inflated size of some firms, driven by long-running market gains, biases valuations higher,” he said.

Brandon Kawal, a partner at Advisor Growth Strategies, emphasized that buyers look at organic growth separate from market returns but use adjusted EBITDA as the primary pricing metric. He noted that offers can exceed 20 times EBITDA for a small set of firms with repeatable organic growth, diverse client channels and strong teams, but such deals remain uncommon.

Karen Barr, president and CEO of the industry association, pointed out that the rising number of SEC-registered advisers reflects both market appreciation and firms crossing the $110 million AUM threshold that triggers SEC registration. She added that many smaller advisory practices operate as lifestyle businesses and do not match the growth profiles acquirers seek.

Industry asset distribution remained uneven. The association found nearly three-quarters of total assets were managed by firms with at least $100 billion in AUM, while just over 87% of registered RIAs managed $5 billion or less, a pattern that places large buyers at one end of the market and numerous smaller firms at the other.

Market gains also affect buyers’ financing. Kawal said stronger returns make it easier for acquirers to raise capital from financial backers and support more aggressive dealmaking. Nesvold added that many firm founders did not initially plan to sell but encounter M&A as a viable option later in a firm’s lifecycle.

Acquirers continue to separate asset growth stemming from new or retained clients from gains produced by market returns when valuing targets. The recent rise in AUM and higher reported EBITDA multiples has left buyers and sellers focusing on whether a firm’s growth is organic or primarily the result of market appreciation.