Buoyed by strong equity markets, U.S. retail brokers saw robust revenue and profit growth in 2025 — conditions that are underpinning ongoing consolidation in the sector, Fitch Ratings says.
In a report published Wednesday, the rating agency said retail brokers and wealth management firms saw their assets under administration hit record heights last year, “driven by market performance, continued advisor recruiting, and solid net new asset growth.”
The larger, diversified firms also benefited from increased capital markets activity and bank lending volumes.
“Trading activity surged to record levels, reflecting heightened market volatility, robust equity markets and expanded product access,” it said.
Firms’ margins were mixed amid declining interest rates, Fitch noted — with some shops seeing margin improvements as their funding costs eased, while others saw margins tighten as asset yields declined.
Overall, the sector delivered strong financial results though, generating double-digit growth in aggregate net revenues and pre-tax profits on a year-over-year basis.
Against that backdrop, merger and acquisition activity between firms was also elevated, Fitch noted, “driven by strategic platform acquisitions and private equity-sponsored consolidation.”
Looking ahead, the rating agency expects consolidation activity to continue in 2026, “with strategic and sponsor-backed buyers supporting competitive bidding and firm valuations.”