HB Wealth and EP Wealth dealmakers say cost of capital, not midterms, moves valuations

Third-quarter RIA transactions fell 17% to 77 from 93 a year earlier, ending seven consecutive quarters of record-setting activity, according to DeVoe & Company's latest Deal Book. The dealmakers in that market say the midterms were not the reason, per Financial Advisor Magazine's account.

Kyle Miller, chief M&A partnerships officer at EP Wealth Advisors, told the magazine that the elections have not come up in his firm's deal discussions. "It has not been mentioned a single time," he said.

Andrew Page, managing director of corporate development at HB Wealth, said the cost of capital is the biggest swing factor in valuations. "Probably the biggest swing factor in valuations today is the cost of capital," he said. "Deals are still getting done. They're just being built a little bit differently." He said the midterms would change the tone in Washington more than the rules, adding that the tax code is on the 2028 ballot, not this one.

DeVoe counted 244 transactions announced through September, ahead of last year's pace, and projects 320 to 340 deals for 2026 against a record 322 last year.

M&A executives say higher borrowing costs, tax questions and tougher due diligence are what is actually on their minds, according to the FA Magazine report. This publication has argued that RIA M&A has become a financing and integration trade rather than an AUM trade.

"We underwrite to the law as it's written today," Page said. "We're not going to pay a seller for a policy outcome we're hoping for." He also warned that "the worst way to ruin a business is to do the wrong deal." The report notes that higher capital gains taxes would reduce sellers' proceeds, changes to carried interest taxation could affect private equity buyers, and higher corporate taxes could alter acquisition economics.

EP Wealth expects larger transactions in the fourth quarter. Miller said some buyers and sellers are arranging closings around year-end for tax-planning purposes. Page said he regards the 2028 presidential election as the more consequential one. In the near term, 78 deals in the fourth quarter would match 2025's record of 322, and 79 would beat it; a repeat of the third quarter's 77 would leave the year one deal short.