Artificial intelligence hasn't created a valuation premium for wealth management firms being sold. But it is changing which buyer sellers choose to join.
That's according to Rush Benton, managing partner at investment bank Gorman Jones, who shared his insider perspective on RIA consolidation with InvestmentNews.
"I haven't seen it," Benton said when asked whether AI use is producing a higher price for sellers - or a discount for those using older tools - in the current market. "In [buyers'] analysis of value of one of these small firms, nowhere have I seen a discount or a premium applied because of their AI usage or lack thereof."
Benton spent 12 years leading M&A at Captrust before founding Gorman Jones to represent sellers. He said large acquirers are buying firms mainly for their client relationships and advisor talent, not their tech stacks. "They're really buying the client base and the advisor talent. They're not buying the technology stack that that small firm has," he said, explaining that major consolidators plug acquisitions into their own built-out platforms.
Reverse due diligence on AI
Rather than buyers scrutinizing a seller's AI use, Benton said independent owners are now evaluating prospective acquirers on the strength of their technology. This represents a shift from traditional M&A dynamics.
"[If] I'm looking at 12 different large national firms ... one of the things I'm going to consider is how good are they at implementing AI and are they devoting the resources to it," he said, describing the thinking among clients weighing a sale.
That shift occurs during heavy AI investment across wealth management and brokerages. Firms are using technology as a recruitment tool, with broker-dealers announcing billion-dollar tech budgets and dedicated AI leadership hires in the RIA and family office sectors.
Benton maintained that large firms with scale and dedicated support teams will likely pull ahead of smaller competition as advisors grow more comfortable with AI in their daily work. "AI executed at an enterprise level with a lot of resources behind it is going to be ... more impactful than what a small firm can do," he said.
A fourth wave of RIA consolidation
Benton described several waves of consolidation. Early RIA sales were motivated mainly by valuation and liquidity concerns. A "platform relief" phase followed, as sellers wanted help with compliance, technology, and accounting. Sellers' focus then shifted to growth support, with platforms like Rise Growth Partners and Sanctuary Wealth filling the gap.
Now, he said more advisors are citing potential AI disruption as a reason to consider selling. One client recently voiced concern about retaining future clients in an AI-driven market - a shift from earlier questions about winning new clients.
"I think it is not far behind that [sellers will say] 'Okay, I want all of that,' and then ask 'Who's going to protect me in an AI environment where we just don't know what the future holds,'" he said.
For owners of firms with high valuations in the current seller's market, Benton argued the numbers increasingly favor selling sooner. He said multiples may plateau or fall from recent highs, and that aggregators are likely to keep winning as AI adoption continues. "You've got to think long and hard about not taking 80% off the table," he suggested, recommending sellers roll about 20% into the acquiring firm's equity.
Why this matters for management
This trend may be relevant for senior managers evaluating strategic exits. AI spending could reshape M&A value, so understanding enterprise-level AI capabilities is key.
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