A host of forces are driving consolidation and change in the RIA sector, the report said.

The wealth management channel of US-based registered investment advisors is "ripe" for consolidation in a heavily fragmented market, research and analytics firm Cerulli Associates  writes.

A need for more resources to deal with regulations, changing client needs and desire by some advisors to sell up and retire are drivers of M&A activity in the space, the firm said.

From 2011 to 2016, three major consolidators grew affiliated assets under management by a five-year compound annual growth rate of more than 45 per cent. During this period, all independent RIAs grew assets by only an 11.7 per cent five-year CAGR, and hybrid RIAs by 10.7 per cent, the organization noted.

"Succession solutions, infrastructure support, acquisition capital, and aggregated buying power are all common motivators that can be attributed to advisors' increased interest in affiliating with consolidators," Marina Shtyrkov, a research analyst at Cerulli, said. "Given the recent momentum behind aggregators and platforms, and the demand for operational and financing support, it is crucial for advisors to remain aware that not all consolidators are created equal."

Cerulli puts consolidator firms into three segments: platforms, financial acquirers, and strategic acquirers. The merits and drawbacks of each segment's business model will often depend on the advisor's motivations for affiliating with a larger partner, the firm said.

"Private equity firms, broker/dealers, and established RIAs are investing in the space and Cerulli anticipates rapid evolution of competitors and business models in coming years," Kenton Shirk, a director at Cerulli, said.