Putting Clients Before Deals
The Registered Investment Advisor (RIA) industry is in the midst of an unprecedented consolidation wave. In 2023, private equity firms accounted for 71% of all disclosed transactions, according to the Echelon 2024 RIA M&A Deal Report. These acquirers — often backed by short-term capital and generous multiples — offer firm owners a chance to monetize their life’s work. However, for clients, the trade-offs can be significant.
At Johnson Investment Counsel, we’ve chosen a different path.
We’ve said no to outside capital and short-term incentives — not because we don’t value growth, but because we believe deeply in what true client service requires. Remaining independent and employee-owned isn’t just a structure; it’s a reflection of our values. It ensures that every decision we make is in the best interest of our clients — not driven by a boardroom or investment committee that’s never met them.
We’re not chasing deals. We’re building relationships that last for generations. And in an industry increasingly shaped by profit margins and exit strategies, we believe our approach isn’t just different — it’s what sets us apart.
The Potential Risks of Private Equity in Wealth Management
Private equity firms have become dominant players in the RIA acquisition space, accounting for the majority of recent transactions. While their capital has fueled consolidation, the private equity model typically operates on a five- to ten-year investment horizon — with the goal of maximizing returns and ultimately exiting the investment. This short-term focus often drives a relentless pursuit of profitability, which can stand at odds with the long-term needs of clients.
For firm owners seeking liquidity, private equity involvement may appear attractive. But for clients and advisors, it can create risks. Clients of recently acquired firms often face consequences such as:
- Increased fees to drive rapid revenue growth and boost valuation
- Declining service quality as leaner staffing stretches wealth management teams
- Advisor turnover leading to inconsistent relationships and a loss of trust built over time
- Shifting priorities where acquiring new clients outweighs serving existing ones
Compounding these risks is the financial strain many acquiring firms now face. Years of aggressive RIA purchases — often funded with debt — have collided with rising interest rates and market volatility. The result is a challenging environment that could put pressure on these firms’ ability to deliver stable, consistent service to clients.
At a time when clients value trusted guidance more than ever, the private equity model introduces risk and short-term thinking into an industry built on long-term relationships that many times span generations.
The Advantage of Independence
At Johnson Investment Counsel, our independence is more than a business model — it’s a cornerstone of how we serve our clients." As an employee-owned firm, we are free from the pressures of outside shareholders, private equity firms, or a distant boardroom that doesn’t know our clients by name.
Our ownership group is comprised entirely of team members — 46 of our 160 employees — who serve clients directly. These are not just business relationships. We know our clients’ stories, their families, their goals, and their dreams. That personal connection shapes every decision we make.
Because we are owners, we think like owners — of both the firm and of the responsibility we carry for each client’s financial well-being. There’s no external agenda, no conflict between profit and service — only a shared mission to do what’s right, every time.
We combine the scale and resources of a large institution with the heart and personal attention of a boutique. Our portfolio management teams work directly with clients to build integrated, customized wealth plans — including tailored investment portfolios that blend individual stocks and bonds, ETFs, mutual funds, and thoughtfully selected private investments, all guided by our in-house research team.
And because wealth planning extends far beyond investments, our independent trust company provides personalized trustee services aligned with each client’s unique estate planning needs.
At Johnson Investment Counsel, independence isn’t a tagline — it’s the foundation that allows us to serve our clients the way they deserve.
Looking Ahead: Staying True to Our Core Values
As the wealth management industry continues to consolidate, we remain unwavering in our mission: to deliver independent, client-first financial guidance, free from external pressures or competing interests.
In a landscape increasingly shaped by short-term deals and outside ownership, we believe independence isn’t just a matter of structure — it’s a reflection of our values. It means every decision we make is rooted in what’s best for the individuals and families who place their trust in us.
That trust is foundational to everything we do. And it’s something we will never compromise.