Wealth management firms that have built strong artificial intelligence systems are gaining an important edge in mergers and acquisitions. As investors and dealmakers look for the most promising registered investment advisor (RIA) firms, having advanced AI technology is becoming a key reason for buyers to choose one company over another.
Buyers with AI lead the M&A scene
Potential acquirers who show clear progress with AI are now viewed as more attractive in the seller’s market. This is clear as big RIA consolidators spend millions to develop top-tier AI platforms.
LPL Financial has pledged almost $2 billion for its "LPL Latitude" initiative, aiming to embed AI into advisor workflows. Meanwhile, Mariner is investing $35 million over five years to add 700 bots to its AI system. Savant Wealth Management is spending $50 million to create an operating system with 1,000 "bionic agents".
This trend shows how RIA acquirers are using AI not just to improve operations but to win over the best sellers. Rush Benton, a veteran dealmaker and head of Gorman Jones, says buyers are now judged by how well-developed their AI tools are.
Sellers with AI see value in other ways
For RIA sellers, using AI can lead to better efficiency, improved profit margins, and better client service, which can indirectly increase their company’s value. Harris Baltch of Dynasty Financial Partners said sellers with AI often get a stronger valuation than those without it.
David Goldstone from Condor Capital Wealth Management explained that AI can help advisors serve clients more effectively. He said it can also get more referrals. This can lead to quicker business growth. It can also lead to a better M&A profile.
But Goldstone clarified that it’s not the AI itself that directly raises a firm’s valuation. Instead, it’s the performance improvements AI enables. For sellers, this means better profit margins, higher data quality, and more efficient processes.
Strong AI platforms from buyers are the focus
The emphasis is now more on the AI skills of the buyer rather than the seller. Dynasty’s Baltch explained that most RIA consolidators buy smaller firms to fit them into a shared system, often replacing the seller’s current AI technology.
John Langston, CEO of Republic Capital Group, said buyers with AI that has proven returns are now the most appealing to sellers looking for growth. He added that real growth in their organizations also makes them appealing. Allen Darby of Alaris Acquisitions added that although few sellers are developing their own AI systems, they are now actively asking about AI when choosing a buyer.
While sellers are not creating their own AI-focused models right now, they are showing more interest in a buyer’s AI capabilities. Darby noted that creating such a model would take years and tens of millions in investment, making it impractical for most firms under $10 billion. Instead, today, the value from AI for sellers remains mostly theoretical.
Still, AI is making a big impact for the acquiring companies, Darby said. In areas where sellers choose a buyer, AI is becoming an important consideration. Those buyers with real AI integration that shows measurable results and scale are standing out more in the eyes of sellers focused on growth.
This growing interest aligns with the idea that the buyer’s platform matters more than the seller’s. RIA consolidators often aim to integrate smaller firms into a shared system, replacing the seller’s tools in the process. This trend supports the shift in focus to the buyer’s capabilities when it comes to M&A negotiations and outcomes.