Add Canadian financial advisory practices to the list of shopping items hit by U.S. President Donald Trump’s global trade war. The great expectations that market watchers had for merger-and-acquisition (M&A) activity this year have only partially materialized, thanks to capital market volatility and a risk-off posture adopted by would-be buyers.
“That’s a discussion that everyone’s having, across Canada and globally — is now the right time to put capital at risk,” said Michael Morrow, managing director, national leader, M&A and capital markets with BDO Canada. “I don’t think any management team or board of directors is going to get scolded for waiting until uncertainty clears.”
Last month’s announcement that Purpose Unlimited Inc. is buying Steadyhand Investment Management Ltd. and Steadyhand Investment Funds Inc. was more exception than rule so far this year.
Morrow said he’s seeing activity in the life and health insurance space that includes strategic consolidators, private equity shops and mid-market players. But the deals are modest. The $100-million-plus mega deals are “more tricky to get done in this environment, because you’ll have multiple stakeholders involved,” he said.
Compared to the first quarter of 2024, North American life and health insurance deal volume is down 27% in Q1 2025, according to BDO Canada.
Valuations are holding firm, between five- and six-and-a-half-times revenue. Measured as a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA), practices are trading between 15 and 22 times. That’s “near record valuations,” Morrow said.
The appeal of that business is its recession-proof nature — the need for insurance doesn’t change in a downturn.
Firms that sell a lot of permanent insurance policies for estate planning purposes are seeing longer sales cycles, Joe Millott, principal and founder of Acquatio, a firm that provides M&A advice to advisors, said in an email response.
“These cases are often viewed as a somewhat discretionary spend and are being impacted by broader uncertainty — including recent tariff discussions,” he said. “While advisor pipelines remain strong, clients are slower to commit, delaying revenue recognition. This extended timeline may also help explain why fewer of these firms are coming to market right now.”
Wealth managers on hold
Wealth management is less attractive as a result of the capital market volatility triggered by Washington. That’s impacting asset levels and investment fees. Buyers with a long-term view continue to see value in Canada’s wealth management sector, but a lot of them are on the sideline for the time being.
BDO Canada reports that North American deal volume was flat in Q1 2025, relative to last year’s first quarter. Valuations are down a little in the wealth segment, but not dramatically.
“Valuations have compressed from the [zero interest rate policy]-era highs,” Millott said. “We saw peak multiples in the 15- to 17-times EBITDA range, but they’ve since settled closer to 10- to 15-times, reflecting the new interest rate environment.”
The irony in all of this is that the last couple of months have left more than a few advisors ready to throw in the towel. Morrow said it could be years before the market returns to a more even keel.
“Clients that we’ve been talking to for a number of years have told us they’re making a decision now to move forward with the sale process,” he said.
Others are on hold. “With markets still volatile, there’s a desire to let [assets-under-management] trends stabilize and paint a stronger growth story for potential buyers,” Millott said.
There’s been a sharp drop-off among international buyers so far this year, Morrow said. Demand among U.S. companies has held more firm.
“The exchange rate is certainly attractive for them to make investments in this part of the cycle,” he said. “I think they still have confidence in the market in Canada.”
This article has been updated to include year-over-year deal volume results.