The Quiet Revolution.
How the map of American Wealth Management got redrawn while we weren't looking.
By Steven, Founder of The RIA Report | Capithos. May 21, 2025. Covering 64,000+ US Investment Firms, and 400,000+ Financial Professionals.
A NEW ERA IN WEALTH MANAGEMENT
Seventeen years. That’s how long I’ve been immersed in the world of finance and capital flows. And for the longest time, if you’d asked me where the heart of American wealth management beat the loudest, the answer would have been reflexive, almost boringly predictable: New York, Boston, Chicago, San Francisco. These weren’t just cities; they were institutions, the bedrock upon which fortunes were built and managed. The thought of, say, Austin, Texas, or Nashville, Tennessee, seriously challenging Greenwich, Connecticut, for a piece of the wealth management crown? It would have sounded like suggesting a Silicon Valley startup could upend global banking. Black Swan.
And yet, the black swans has a funny way of becoming the inevitable when you’re not looking. Especially in markets and capital flows.
For the past eighteen months, I’ve been a quiet observer, a digital cartographer, meticulously tracing the subtle, almost imperceptible tremors that have now grown into a full-blown seismic shift across our industry.
The Ticking Clock: Watching the Unseen Shift
There's a particular kind of clarity that comes from watching change not as a series of snapshots, but as a continuous film. Since late 2023, through building these datasets, I've been doing just that: tracking the month-by-month registrations of RIA and SEC firms across every state. Not just where they are, but where they are going, where they are emerging, and, just as critically, where they are quietly…fading.
It’s hundreds of hours of data, thousands of hours of code, yes, but it’s more than that. It’s like having a time-lapse camera on the entire industry. And the patterns that emerge when you speed up the film are startling.
Consider California. In October 2023, it was the undisputed titan with 8,167 registered firms. Fast forward just fifteen months to January 2025, and that number had slipped to 8,004. A loss of 163 firms. It’s not a collapse, not yet. But it’s a leak in a ship that once seemed unsinkable. Even with a slight uptick by April 2025 (to 8,083), the Golden State is still playing catch-up to its former glory. New York? A similar story of stagnation, a gentle giant treading water while others surge ahead.
Now, turn your gaze to Texas. During that same period, while California was wrestling with its numbers, Texas quietly added 172 firms, growing from 4,410 to 4,582. Florida was even more dramatic, ballooning from 4,266 to 4,514 firms, an astonishing 248 new entrants planting their flags.
But the real "tell" the kind of signal that often gets missed in the headline numbers is what’s happening in what we might call the "flyover states" of wealth management. Arizona, in that same 18-month window, saw its RIA and SEC firm count jump by nearly 8%, adding 105 firms. Utah? Up 7.1% with 55 new firms. Idaho, often overlooked, added 27 firms, a number that seems modest until you realize it’s a 6.5% growth spurt. Month after month, the needle in these "emergence zones," as we call them at Capithos, just keeps ticking upwards. It's not a gold rush; it's a persistent, steady migration. Tennessee, for instance, has barely skipped a beat in its climb from 1,040 to 1,103 firms.
This isn't just about isolated success stories. The comprehensive RIA Registration Index from Capithos paints a stark regional picture for 2023-2025: the Southeast is up a staggering 28.7% in new RIA registrations. The Southwest? Up 23.9%. Meanwhile, the traditional powerhouses of the Northeast and the West Coast are down 3.4% and 5.8%, respectively.
Speaking to a colleague at The Abernathy MacGregor Group (Placement firm/recruiting for global financial institutions, investment banks, and corporate clients) mentioned the following:
“It’s not that the old map is wrong. It’s that the coastline has fundamentally changed. We’re charting new harbors, and some of the old ones are silting up. And these aren't just dinghies washing ashore; the average new RIA in these growth regions, is managing around $450 million in assets. These are serious players making calculated moves here that’s going unnoticed.”
The Unseen Currents: What’s Really Driving the Exodus?
So, what happened? How did an industry so rooted, so tied to the immutable centers of financial power, suddenly find itself on the move? It wasn’t one thing. It was a confluence of seemingly unrelated currents that, together, created a perfect storm of change – an "invisible hand," if you will, redrawing our professional landscape.
Think about it:
The Tether Snapped: Remote work, accelerated by the pandemic but a trend long in the making, did more than just change how we commute. It fundamentally severed the centuries-old link between where elite talent livedand where elite companies were headquartered. If your clients and your team could be anywhere, why did youhave to be in a high-cost, high-tax urban center?
The Taxman Cometh (Differentially): State tax differentials aren’t new, but their impact became acutely magnified. When you’re talking about significant personal and corporate income, the difference between a Florida or Texas (no state income tax) and a California or New York becomes a powerful financial undertow.
The Boomer Compass: As Baby Boomers entered their peak retirement years, their preferences began to reshape more than just healthcare. Many started prioritizing lower-cost regions, better amenities, and climates more suited to their golden years – and their wealth, and often their advisors, began to follow.
The Tech Equalizer: For decades, being in a major city meant access – to information, to talent, to clients. But technology, from sophisticated CRM systems to seamless video conferencing and secure client portals, has democratized access. An advisor in Boise, armed with the right tech stack, can now offer a client experience virtually indistinguishable (and in some ways, more personal) than an advisor in a Boston skyscraper. We found at Capithos that by April 2025, around 61% of client interactions at RIAs were happening digitally, not face-to-face. And the kicker? Client satisfaction scores showed no real difference. Proximity, it turns out, was a weaker glue than we thought.
This isn't just theory. Look at the M&A data. In 2020, firm data showed roughly 62% of RIA acquisitions involved firms in those top 10 traditional wealth cities. By the first quarter of 2025? That number had plummeted to 41%. The gravitational pull of the old centers is weakening.
The Great Valuation Flip: When Nashville Became Pricier Than Manhattan
Here’s where the story gets truly counter-intuitive, the kind of plot twist that makes you question everything you thought you knew. For as long as anyone can remember, RIAs in major wealth centers – New York, San Francisco, Chicago – commanded premium valuations. It was simple logic: prime location equaled prime growth potential. An 8.4x EBITDA multiple for a top-tier urban firm versus 6.1x for a firm in a "secondary" market in 2019? That made perfect sense.
But the Capithos transaction database now shows something astonishing: the gap hasn't just closed; it's inverted. Today, RIAs in those high-growth "emergence zones" think Austin, Nashville, Raleigh are fetching average multiples of 10.2x EBITDA. Their counterparts in the traditional hubs? They’re now at 8.7x.
I surveyed one of our founding data users who’s a Chief Strategy Officer at a $2.5 billion SEC firm which growth has stemmed from acquisitions. 17 firms acquired since 2023. Her answer was illuminating:
"Steven, we're not buying a snapshot of what a firm is today. We’re investing in its trajectory over the next decade. Frankly, a well-run $500 million AUM firm in Phoenix or Charlotte often has a clearer, more compelling growth runway than a $1 billion firm in a saturated, high-cost legacy market."
And she’s not wrong. Our data repository shows organic growth rates for RIAs in these emerging regions averaging 12.7% annually. In the traditional centers? It’s closer to 7.3%. The smart money, it seems, is following the new map.
The Arbitrage Opportunity Hiding in Plain Sight
It also comes down to simple economics, something I call "client acquisition arbitrage." Imagine you're farming. If it costs you $12,500 in seed, fertilizer, and labor to acquire one prime client in Manhattan (a recent Capithos estimate for top-tier markets), but only $4,800 to acquire a comparable client in Raleigh or Scottsdale, where are your profit margins going to be healthier? Where is your enterprise value going to compound faster?
RIA owners are now living in this. Notably a RIA owner who manages a $1.8 billion AUM generating practice summed it up aptly in response to Capithos. He relocated his firm from Chicago to Nashville in 2023. He kept his marketing budget the same. The result? New client acquisition jumped 93% in the first 18 months. That’s not just a rounding error; it’s a fundamental shift in the economics of growth.
The M&A Frenzy: It's Not Just About Scale Anymore; It's About Location
You’ve seen the headlines: RIA M&A is on a tear. 284 deals in 2024. On pace for around 320 in 2025 based on activity through April. But here’s what the headlines don’t always capture: the motivation behind the deals has flipped. Just three years ago, industry surveys along with our repository showed about 68% of acquirers were buying firms to add new capabilities or specialized expertise. Today? A striking 71% tell us their primary driver is geographic expansion, planting a flag on this newly redrawn map.
And they’re not just hunting whales in the old ponds. Five years ago, the prized targets were $500 million-plus AUM firms in the usual metropolitan strongholds. Now, some of the most intense bidding wars are for $250-$400 million firms in places like Boise or Greenville, firms that might have been acquisition afterthoughts in the last cycle. The smartest acquirers are looking at different spreadsheets now: population growth, business formation rates, wealth migration. They’re playing a new game.
The Rising Tide of Consolidation (and Where It's Cresting)
This hunger for geographic reach is fueling an already rapid consolidation. According to the Capithos ownership database, nearly a quarter (23.8%) of all RIAs are now owned, at least in majority part, by SEC-registered aggregator firms. That’s up from just 14.5% in 2022. And in those "sunrise markets" of the Southeast and Southwest? It's even higher, at 28.7%.
There's a fascinating "consolidation threshold effect" we've observed at Capithos. Once aggregator ownership in a given metropolitan market hits around 25%, the pace of further consolidation in that market often doubles or triples over the subsequent 24 months, sometimes racing past 40% concentration. Out of 67 major metro areas Capithos tracks, 31 have already blown past this tipping point. And guess where most of them are? You guessed it – those high-growth, emerging wealth regions.
"The cottage industry of a decade ago is giving way, fast. We're seeing the rise of super-regionals, dominant players being built not around old financial capitals, but around these new corridors of American wealth." For the independent RIA owner, especially in a growth market, this is a moment of both unprecedented opportunity and profound urgency. Your strategic value might never be higher.
- CIO, SEC firm in Colorado
The Talent Follows the Tide
And it’s not just firms and clients on the move; it’s the advisors themselves. The old model of hiring local talent with an established local book is being upended. Capithos Advisor Migration Analytics reveal that nearly 18% of CFPs have switched states in the last three years – more than double the rate we saw historically. And these aren’t just rookies; the median experience level of advisors moving into high-growth markets has jumped from 8.3 years in 2021 to 12.1 years today. The seasoned veterans are voting with their feet.
This creates a powerful flywheel: clients move, advisors follow, service capacity expands, which attracts more clients, which draws more talent. For firms in those legacy markets? It’s a retention nightmare. The CEO of a prominent Boston firm told me, with a sigh, "For the first time in a quarter-century, we’re offering substantial equity to senior advisors not as a growth incentive, but just to persuade them not to pack up for Florida or Arizona."
And here’s the kicker: Capithos research shows that when advisors relocate from a legacy market to a high-growth one, their average revenue production increases by nearly 24% within 18 months, even after accounting for the support of their new firm. They’re not just relocating; they’re often re-energizing their growth.
The Alpha Markets: Where Opportunity Knocks Loudest
So, if you’re an RIA owner looking at this redrawn map, where do you even begin? "Expand into high-growth markets" is easy advice to give, harder to execute. That's why at Capithos, we developed the "Opportunity Markets Matrix." It’s an exhaustive analysis of 217 metropolitan areas, looking at everything from five-year wealth migration and new business formation to RIA density, advisor movement, and even average client acquisition costs.
The result? A clear identification of what we call "Alpha Markets" – locations that offer that potent combination of rapidly growing wealth pools and, crucially, relatively lower competitive saturation. As of our April 2025 analysis, the top 10 are a revealing list:
Nashville, TN
Raleigh-Durham, NC
Austin, TX
Tampa-St. Petersburg, FL
Boise, ID
Salt Lake City, UT
Charlotte, NC
Phoenix, AZ
Greenville, SC
Colorado Springs, CO
What’s missing is almost as telling as what’s there. New York, Boston, Chicago, San Francisco – they’re not on the list. Capithos now categorizes these as "Legacy Markets": immense existing wealth, yes, but often coupled with diminishing growth prospects and brutal competitive density. It’s a sobering thought that nearly 60% of all RIA assets in America are still managed by firms headquartered in markets that Capithos now identifies as having below-average future growth potential. That’s a disconnect. A big one.
The Unfolding Decade: What the Next Five Years Might Hold
Based on current trajectories, historical patterns, and our proprietary projection models at Capithos, the next five to seven years are poised to further entrench this new reality:
Hyper-Consolidation: We project aggregator-controlled RIAs could reach 41% of the market by 2030. In those "Alpha Markets"? It could easily exceed 55%.
Valuation Divergence Widens: That 10.2x vs. 8.7x multiple for firms in growth vs. legacy markets? We see that spread widening further, potentially to a 40% premium for firms in prime geographic locations by 2030. Location, location, location will take on a whole new meaning for M&A.
The Squeezed Middle: The $500 million to $2 billion AUM independent RIA, once the backbone of the industry, will find itself under increasing pressure – either scale up, join a platform, or specialize so intensely that geography becomes less relevant.
The Rise of the Super-Regionals: Look for 20 to 25 firms to hit the $20 billion+ AUM mark, not by being national behemoths, but by achieving deep, concentrated dominance in specific high-growth regions.
Perhaps the most symbolic projection: by 2030, Capithos data suggests at least four of the top ten largest independent advisory firms in America will be headquartered outside those traditional coastal wealth centers. Today, all ten are within them. That’s not just a shift; it’s a reordering.
"In five years, the industry’s center of gravity will have noticeably moved. In ten, people will wonder why it was ever anywhere else."
The Crossroads: Complacency is Not a Strategy
Every RIA owner, every advisor, every industry stakeholder is now standing at a crossroads. The old maps are becoming dangerously outdated. To cling to the assumption that wealth, talent, and opportunity will remain tethered to their historical anchors is no longer just conservative; it’s a gamble against a very strong tide.
Other industries have faced these geographic reckonings. Retailers who dismissed suburban malls, then e-commerce. Media titans who believed New York was the only place to be. Banks that underestimated the power of fintech operating from anywhere. The pattern is familiar: a period of disbelief, then reluctant acknowledgment, then a frantic scramble to adapt.
Our industry is in that critical period of acknowledgment right now. For some firms, the path forward will be bold geographic expansion. For others, it will be a deep investment in technology and specialization that makes location truly irrelevant. And for some, it will be a strategic decision to align with a partner better equipped to navigate this new, multi-polar world.
The one strategy that is almost certainly doomed to fail? Complacency.
This geographic revolution demands a new way of thinking. It forces us to ask a fundamental question: Is your firm built for where the wealth was, or where it is going?
The advisory firms that will not just survive but thrive in this new era will be those that are more than just good fiduciaries or smart investors. They will be astute students of demography, keen observers of economic geography, and courageous enough to challenge the old assumptions. They will understand that today, the most critical insight might not be what their clients are investing in, but where they – and their future clients – are choosing to live, work, and build their legacies.
The map is being redrawn. It’s time to decide if you’re going to follow the old lines or help chart the new ones.