“The internal rate of returns for buyers that we’re seeing would make most PE firms crazy,” Seivert said, noting that profits are north of 30 percent annualized.
“Sellers may be leaving money on the table,” Seivert warned, because PE firms and other buyers may not appreciate that large RIA firms’ growth potential might be superior to that of other types of financial companies.
More than 50 PE firms have invested in 25 RIA aggregators, according to Echelon. And 60 PE firms have invested $350 million in the red-hot robo-advisor channel during the last year.