A soft RIA deal quarter tells sellers about 2025, not 2027

Financial Planning reported Thursday that DeVoe & Co.'s quarterly count produced a figure the RIA market has not seen since late 2024: 72 announced purchases of advisory firms in the third quarter through Sept. 22, a 19% decline from the same stretch a year earlier and the first quarter-over-quarter slowdown in nearly two years, with the quarter closing Wednesday and a run of sequential records likely ending unless announcements accelerate in the final days. The last quarter that failed to set a record, according to DeVoe's data, was Q3 2024, when 65 completed transactions tied the year-earlier tally.

Read the obvious way, that looks like a market cooling under a seller's feet; read it the way the consulting and valuation firm that assembled the data reads it, and it says very little about demand, price, or leverage at the table, the three things an owner preparing to sell wants a count like this to settle. The number carries timing, and the timing points in a direction most owners will not expect.

David DeVoe, the firm's founder and CEO, points out that announcements of acquisition deals typically trail the actual decision to sell by six to 18 months, which makes published counts a lagging indicator of how owners and buyers felt long before any release went out. The 72 transactions counted this quarter were chosen against a stretch that included tariff hikes, the war with Iran, and rising gas prices; those variables rarely reshape a deal's economics, DeVoe says, but they do consume an owner's calendar, because anxious clients take the hours a sale process would otherwise absorb. He calls the pattern "a natural gravitational force for this industry" and sees it as the likeliest explanation for the dip, not a weakening of demand for RIA purchases.

Nineteen percent fewer announcements is not evidence that practices are worth less this fall. It is evidence that fewer owners opened a process during a stretch of noise, and the slowdown had begun showing up in the deal data before Thursday's release, which makes the quarter a confirmation more than a turn.

Nearly two years of record quarters is long enough for seller expectations to harden; an owner who has been reading record tallies through the run has, in effect, been benchmarking a market that may not be the one they sell into, and the likeliest damage from a quarter like this one is not that prices fall but that a seller's anchor and a buyer's model drift apart at the same time. That kind of gap usually does not surface as a failed auction; the likelier shape, if it shows up at all, is a longer process and more of the purchase price deferred into structure, which is where a slow market extracts its payment well before any headline multiple moves.

Rates are the one external variable DeVoe ties directly to buyer behavior: rising interest rates can make the private equity firms behind some of the biggest transactions in the industry more reluctant to buy, which puts the Fed's quarter-point increase last week—and its hint that further increases could be needed to tame inflation—closer to a large seller's outcome than any announcement count. DeVoe expects only a slight near-term drag on activity, a reasonable expectation for volume, though the reluctance he describes attaches to a particular set of buyers. Any drag from September's hike is likely to surface first in the largest transactions, where a sponsor's cost of capital does much of the pricing, and last in the small tuck-ins that never draw a sponsor. Financial Planning, which reported the data, has also published on which firms can and can't fetch 20 times EBITDA with private equity, a reminder that the top of this market and its middle do not price off the same bid.

One caution for anyone using the tally as a timing tool: the current figure counts announced purchases, while the 65 transactions that tied Q3 2024 are counted as completed, and with a decision-to-announcement lag that can reach 18 months, those are different populations.

Leverage is the harder question, and it cuts both ways: if DeVoe is right that the dip does not signal weakened demand, then a quarter in which fewer owners brought firms to market, against a buyer pool he describes as still willing, is not obviously a worse position to negotiate from. But that is one source's claim about demand, and it stays a claim until the fourth-quarter count either confirms the slide or contradicts it.

The cost of the volatility lands earlier than the table anyway, and, as this publication has argued, the succession gap is a documentation problem that Thursday's data does not disturb; the quarter sharpens it, if anything. A seller's outcome is decided by the condition of the firm in the stretch before it goes to market: the successor named in the file, the client relationships that outlast the founder, the numbers a buyer can diligence without a translator. Owners who spend a noisy quarter reassuring clients have one less quarter to spend on that, which is precisely the mechanism DeVoe describes when he attributes the dip to calendars rather than to prices.

The full third-quarter tally arrives after the quarter closes Wednesday, and the deals in it were decided in 2025; the ones that will price an owner's retirement are being decided now, against a rate environment the lag hides.