The wealth management business has become a magnet for private capital, which has driven a wave of consolidation among independent registered investment advisor firms. Echelon Partners, an investment banking and consulting firm, says RIA dealmakers announced 120 transactions from April through June, a second-quarter record. Private-equity-backed buyers accounted for 91, or more than three-quarters, of those deals.

Beneath the radar, private capital is also being used to turn upstart independent firms into formidable businesses, with benefits for advisors and clients alike. "If PE investors' financial capital is used to enhance the set of services offered to clients, that is a very good thing," says Raj Bhattacharyya, CEO of Robertson Stephens Wealth Management in San Francisco, which ranks 92nd in Barron's 2026 Top 100 RIA Firms list.

At the same time, private capital can come with strings attached. Outside investors have an interest in containing costs to maximize profits. And PE firms often exit investments after five to seven years, meaning they and the wealth management firms they own must find new investors, and the firms must adjust to the new ownership. This can dilute RIAs' focus on supporting their advisors and their end clients.

There is no doubt that PE money has flooded the industry. During the first three quarters of 2025, private-equity investors plowed more than $32 billion into 212 wealth management transactions, exceeding the nearly $29 billion across 249 deals during all of 2024, according to PitchBook.

Wealth management firms seek PE backers' capital to provide liquidity to founders, to hire advisors and subject-matter experts, to buy or build better technology, and more. For their part, PE firms and their investors get access to strong, highly predictable cash flows. Wealth management firms typically generate revenue by charging clients annual fees that are a percentage of the clients' assets they manage. Those fees grow as the value of the stock market increases and boosts client portfolios.

The stakes for all of this have become greater as independent wealth management firms, once dwarfed by powerhouse Wall Street brokerages, grow into giants in their own right. For example, Creative Planning, based in Overland Park, Kan., said it managed $419 billion in client assets as of June 30, 2026.

Our 2026 RIA ranking, which can be a useful resource for investors looking for a financial advisor, illustrates the industry's growth. The average assets under management of all the firms ranked this year was $43.3 billion, up from $34.3 billion in 2025. Mergers and acquisitions played a role, with deals conducted over the 12 months ended June 30 accounting for 5.8% of firms' average annual revenue and 7.1% of their average AUM.

Several firms made big leaps in our ranking thanks to their dealmaking. Wealthspire ranks sixth on this year's list, up 10 spots from 2025, when it ranked 16th. The firm's acquisition of Fiducient Advisors in October 2025 added $97.5 billion to Wealthspire's AUM. Elsewhere, Waverly Advisors gained 21 spots to rank 27th this year. Since January, Waverly has acquired four RIAs, adding a total of $65.3 billion to its AUM. And Apollon Wealth Management jumped 13 spots this year to 67th, as its AUM grew 67% year over year thanks to an aggressive M&A strategy.

Ryan Parker, CEO of EP Wealth Advisors-based in Torrance, Calif., and ranked ninth in our 2026 RIA list-likens access to capital as "oxygen" that lets wealth managers grow. Backed by PE firms Ares Management and Berkshire Partners, EP Wealth has invested in a range of technology tools to increase productivity and save advisors time so they can focus more on solving clients' problems and less on paperwork.

Outside capital helps firms like EP Wealth invest in expertise at a time when the industry is competing to serve the growing number of families with complex wealth. "You've got to be able to afford the CPAs [certified public accountants] and the JDs [lawyers]," says Parker. With help from its backers, EP Wealth can figure out which technology solutions to invest in and when, Parker adds.

"The private-equity discussion in the boardroom always intersects with the needs of our advisors," he says. "That includes tangible benefits-real ways to improve their organic growth, their productivity, and the ability to deliver the full value proposition to high-net-worth and ultrahigh-net-worth clients."

Not all providers of private capital are so enlightened. The cliché of a private-equity firm-it brings you flowers on the first date and is counting paper clips in your office a few months later-isn't based on nothing, says Leo Kelly, CEO of Verdence Capital Advisors in Hunt, Md. "I think it's fair to say that there are situations like that," he says.

Verdence announced its latest private-equity capital raise in March: Wealth Partners Capital Group and HGGC acquired a majority stake in the company, while previous PE owner Emigrant Partners exited.

Having served a number of business-owner clients who've taken private equity, Kelly says problems crop up when expectations aren't aligned. "Too many founders feel like the incoming investment is a reward for what they've built and all the great work they've done," he says. "But an investor wants to make a rate of return on their capital, so their primary concern is what happens going forward."

Wealth management entrepreneurs find that PE firms start calling once they surpass $100 million of assets under management. Human nature makes it tempting to take the money-but not every firm does.

"We tell them it's just not the right choice for where we are right now," says Andree Mohr, president of Integrated Partners, which ranks 24th in our 2026 RIA list. The Waltham, Mass.-based firm has chosen to remain independent because its leadership likes decision-making autonomy, she says: "We are led by an entrepreneur and made up of entrepreneurial advisors, and because of that, we want to ensure that we can control our own destiny."

Integrated Partners, an RIA platform that pairs advisors and CPAs from its national network, invests in growth using its own cash flows, she explains. It recently launched an advisor dashboard that syncs advisors' disparate technology with client data, letting advisors provide clients with deeper insights while reducing manual work.

The firm doesn't need the complications that can come with outside capital partners, says Mohr. "When you have to focus on ensuring that multiple constituents are happy, then you've got to have multiple plans to do that," she says. By focusing solely on clients, she says, "we can have that singular purpose."

Minority Stakes

Private capital's presence in the industry looks different than it did in the 2010s, when sponsors often bought a majority stake in a firm and then used it to gobble up smaller businesses. Full acquisitions gave PE firms authority over key business decisions and eventual exit timing. Today, many fast-growing RIAs want capital and support but without becoming part of a consolidator. Minority-ownership deals-often for around 20% of a firm-have become more typical. A noncontrolling investment can give founders liquidity; finance acquisitions, recruiting, and technology; and help solve succession planning, while leaving management in charge of the brand, culture, and daily strategy.

Wealth manager Concurrent brought on Merchant Investment Management as a minority investor in 2021, in part because of the minority noncontrol aspect, says Concurrent CEO Nate Lenz. "At the end of the day, they're bringing capital and strategic guidance, but because of that minority noncontrol seat, the tail can't wag the dog."

One advantage of selling a minority stake is evident when it comes to making founders liquid. Rather than require founders to choose between independence and a full sale, a minority PE investment can function as a partial liquidity event. The investor buys newly issued equity, the shares of existing partners, or a mix of both. Selling partners can convert part of their wealth-which has been tied up in their business-into cash. Then they can diversify their investments and still retain a controlling interest, management duties, and exposure to the firm's growth.

What About Clients?

What if PE money is used for M&A? Is it good for clients? It depends, says Bhattacharyya, whose business is majority owned by private-equity funds managed by affiliates of Long Arc Capital. As firms grow through acquisitions, they can use their scale to access more and varied planning and investing resources.

In many cases, firms use acquisitions to add tax, estate-planning, or lending capabilities. Greater scale can also improve cybersecurity. And a deeper talent pool can strengthen continuity if an advisor retires or dies. "If they keep the client's interest first, there's an absolute client benefit to M&A," Bhattacharyya says. "If it's just creating a bigger version of the same firm, there's not a whole lot of benefit."

Will Pitt, co-founder and CEO at Evermay Wealth Management, says acquisitions can give clients access to deeper expertise, better technology, and a broader team of professionals. "The risk is when M&A becomes more about accumulating assets and creating enterprise value than improving client outcomes," he says.

Larger firms have advantages for advisors, and not just in terms of technology and marketing. Younger advisors are more likely to have clear career paths in larger firms. And large firms' client-referral engines can generate more business. On the downside, advisors may face new compensation formulas, streamlined investment menus, or pressure to meet growth targets.

But good or bad ownership isn't determined by whether you're working with an advisor at a firm still owned by the founder or a PE investor, argues Bhattacharyya. An owner-operator "could choose to disinvest in the business and take more profit out," he says, just as a PE investor might. "The real question is, are your shareholders' interests aligned with your clients' interests?"

For clients, the rise of private-equity ownership raises practical due-diligence questions. One to ask your advisor: Who owns your firm now, and what is their investment horizon? Understanding ownership dynamics can reveal how much pressure the business faces to grow quickly or cut costs.

Also ask advisors about who "owns" the relationship: If the advisor leaves the firm, can you follow that advisor and their team elsewhere, or will you be expected to remain with the same company? Especially in firms created through multiple private-equity-backed mergers, client relationships are often centralized at the firm level.

Finally, ask whether advisors' compensation incentives have changed since the investment. For instance, are advisors being steered to recommend certain investments or other products that benefit the new owners?

Understanding a prospective firm's ownership structure and how it might affect its advisors can help investors make the right wealth management choice for the long run.

Write to rankings@barrons.com