Want to Grow? Keep Doing the Right Things, Over and Over

And Mayhue should know: She just won a 2025 Luminaries award for M&A leader of the year in the category of RIAs with more than $10 billion in assets under management or advisement.

In calendar year 2025, the firm will have completed 13 transactions. It is seeking team players rather than “rogue” individualists or “Lone Ranger” advisors, Mayhue emphasizes.

Rick Kent, Merit's CEO and founder, notes in the interview that Merit isn't buying firms just to turn them over.

“We’re very focused on long-term growth. We’re not building to sell," he says. "We’re building to transform."

The RIA, serving $20.78 billion in assets, last year replaced LPL Financial with Purshe Kaplan Sterling Investments as its broker-dealer. All Merit acquisitions carry the Merit brand.

And with funding from a recent minority investment, “We have a lot of dry powder to continue our M&A,” Kent adds.

Here are highlights of our conversation:

THINKADVISOR: What’s the future of RIA consolidation? How long does it continue?

KAY LYNN MAYHUE: It seems like there’s no end in sight. When an RIA gets to about the $700 million level, they know it’s going to be very hard to compete because larger RIAs have so many resources. So consolidation is really speeding up.

Will this business be like the insurance or banking industries, where all the small [entities] are going away? Lots of people think so.

THINKADVISOR: Your firm made 16 acquisitions over the past 18 months. Can you describe your process-driven approach to M&A? I understand that it's a repeatable model focused on cultural alignment, advisor retention and operational integration. Is this correct?

MAYHUE: Yes. We’ve grown a lot. Much of that growth has come in the form of partnerships, so I think that formula around providing excellent infrastructure, a great transition support system and a [strong] transition team post-transaction are what has made [our] advisors so successful in continuing on the other side of a transaction.

THINKADVISOR: What happens after the acquisition?

MAYHUE: Advisors have all the support and the central nucleus to plug into: for example, our technology stack, investment team, financial planning resources. Those enhance the client experience as well as the advisor and team experience.

But we’re not a one-size-fits-all where everybody must conform and do things exactly the Merit way. We’ve provided a structure; the advisors plug into the things that will help them continue to be successful and serve their clients better.

THINKADVISOR: You sold a minority stake in Merit to Constellation Wealth Capital, a private equity firm. Why, and what did it do for Merit?

RICK KENT: That was the most recent investment. Prior to that, we took our first capital partner at the beginning of 2021. Four-and-a-half years later, we wanted to raise additional capital to continue our M&A process.

Our new partner [CWC] has been really great. What they’re bringing to the table already is business strategy. They picked up a couple of board seats. They’re helping with key positions, key hires. They brought a great debt facility that replaced [what we had] with much better terms.

So now we have a lot of dry powder to continue our M&A.

THINKADVISOR: What’s another major difference that Merit has as an aggregator?

KENT: A lot of our competitors are private-equity owned and controlled. We have only a minority investor at around 37%. We’re very focused on long-term growth. We’re not building to sell.

We don’t make decisions based on valuation or trying to get the most profitability. We’re building to transform. We help firms grow faster than they can grow on their own.

We’re looking for opportunity partnerships, where [advisors] can grow faster, and we can grow faster.

THINKADVISOR: So if you see an RIA that you think would be a good one to acquire, do you approach them, or is it vice-versa?

MAYHUE: It’s absolutely both. Look at calendar year 2025: We will do 13 transactions. Many of them are through personal relationships. Some advisors are finding us through stories you and other publications cover. Some are through partnership successes we’ve had.

Other times, advisors have consultants or bankers they’re working through to help them find the best partner.

THINKADVISOR: There’s no shortage of competition when it comes to acquiring RIAs, whether by an aggregator, private equity or other types of firms. What specifically do you look for in acquisitions?

KENT: Our [biggest] differentiator is our culture. Quality people are looking for a great culture. We spent [years] building one. That has become something of a magnet.

MAYHUE: We spend a lot of time with the folks we’re in conversation with about joining the firm. We want to make sure there is cultural alignment. We’re looking for people that truly value the client relationship as well as wanting a better situation for their team.

We [seek] people who believe that collaboration is better for our industry and want to be part of a team versus the rogue individualist and Lone Rangers out there. We love people that have fire in their belly.

THINKADVISOR: When they join you, do the advisors keep their firm names or go under the Merit name?

MAYHUE: We’ve established guardrails around M&A to be scalable and run efficiently. We figured out that where we need to have a narrow guardrail is branding. So everybody comes in under the Merit brand.

THINKADVISOR: My understanding is that you specialize in acquiring firms that manage complex portfolios. Is this something you especially look for in partnering?

MAYHUE: No. We have very broad and robust portfolio options for our advisors. We can accommodate those who are doing things relatively simply, and advisors that have more needs in, say, the alternative space or that might be doing some things that aren’t a typical off-the-shelf situation.

THINKADVISOR: What’s Merit’s ultimate goal?

MAYHUE: There’s no number, some shiny star out there. There is no end in sight. There’s so much potential for the industry.

We’re just getting started. We’re just barely scratching the surface.

Our goal is to continue to grow and make a bigger impact in the industry and the communities where we are and to [expand] into new ones.