Financial services M&A activity continues to build momentum driven by consolidation, technology investment and the evolution of alternative asset management and fintech markets. Transaction volumes are steadily increasing across several key subsectors, particularly in the US, with similar dynamics emerging across Europe and Asia. For R&W insurers, this presents a growing opportunity, but one that requires increasingly nuanced underwriting. The financial services sector spans a broad range of businesses, from certified public accountant (CPA) firms, banks, wealth managers and private equity managers to fintech companies and crypto firms, all carrying distinct regulatory considerations and underwriting challenges.
Underwriting appetite in the sector is shaped by a detailed understanding of the operational models, regulatory frameworks and claims risks associated with different financial services businesses. As deal activity continues to accelerate, several themes are expected to shape both M&A and underwriting priorities through 2026.
Growing financial services M&A deals
M&A activity in the US among registered investment advisors (RIAs), wealth management firms and CPAs has grown the past few years. Much of this activity is being driven by scale, succession planning and growing pressure to invest in technology platforms and operational infrastructure.
Private equity-backed roll-up strategies continue to be a driver of deal activity, particularly among small and mid-sized accounting firms and advisory businesses. These sectors are expected to remain active through 2026 as firms seek greater efficiency and scale while continuing to invest heavily in technology.
Additionally, M&A in private investment firms, including private equity managers and alternative asset managers, continues to accelerate. Many firms established 20 to 25 years ago are now approaching a succession planning phase, creating opportunities for acquisitions and strategic partnerships.
Investment firms are increasingly bifurcated between high-performing firms with strong track records and weaker-performing platforms that may struggle to attract buyer interest. Larger private equity firms are also continuing to acquire specialist managers to expand sector expertise and grow assets under management.
Private credit was a particularly active area throughout 2024 and into early 2025, although recent market uncertainty may temper activity in the near term. Despite this, the broader alternative asset management space is expected to remain a significant source of M&A activity. Activity is increasingly being driven by two trends - large private equity platforms acquiring specialist firms to add sector-specific expertise and expand investment capabilities; and mid-sized firms pursuing acquisitions to increase assets under management.
Demand in fintech
Fintech M&A continues to grow and mature with both traditional financial institutions and fintech businesses pursuing acquisitions to broaden capabilities and expand market access. Traditional financial services companies continue to acquire fintech firms to bring digital capabilities in-house, while fintech businesses are expanding further into mainstream banking and financial services activities. This is expected to continue accelerating over the next several years.
From an underwriting perspective, established fintech businesses are generally viewed more favourably than cryptocurrency businesses due to stronger regulation, greater operational maturity and clearer compliance frameworks. Areas such as payments and financial software continue to attract insurer appetite, although underwriting still requires careful diligence around cybersecurity, data privacy and regulatory compliance.
While fintech continues to mature, cryptocurrency-related transactions remain challenging for many R&W insurers due to ongoing regulatory uncertainty and governance concerns. In the US, cryptocurrency businesses may be subject to oversight by the SEC, CFTC and other federal and state authorities, depending on the nature of their assets and activities. The applicable regulatory framework continues to evolve. Although parts of the industry are moving toward greater regulatory compliance, the sector still faces reputational, compliance, governance and operational concerns following several high-profile collapses in recent years, including FTX and Genesis, which continue to weigh on underwriting sentiment across the transactional risk market.
Where R&W insurers are deploying appetite
Within financial services M&A in the US, insurer appetite remains strongest for non-bank financial institutions and advisory-focused businesses. Many transactional risk insurers generally avoid licensed banks due to reinsurance restrictions, heightened regulatory scrutiny and the elevated risks associated with consumer-facing banking activities.
Appetite is strong for businesses such as boutique investment banks, financial advisory firms, wealth management platforms, accounting firms, asset managers and established fintech businesses. Compared with heavily regulated consumer-facing banks, these businesses are often viewed as more straightforward to underwrite due to simpler operational structures and lower exposure to consumer, environmental and operational risks.
Most deal activity continues to occur in the mid-market, with transaction values typically ranging from several hundred million dollars up to approximately US$ 2 billion. This reflects the profile of many of the businesses driving financial services M&A activity, including regional CPAs, mid-sized private equity managers and growing fintech companies. Typical transaction timelines remain relatively efficient, with many deals closing within 60 to 90 days. However, more heavily regulated transactions or larger strategic acquisitions can extend considerably longer where regulatory approvals are required.
Underwriting challenges
Many of the underwriting challenges facing financial services M&A reflect broader macroeconomic and geopolitical pressures impacting global dealmaking. Interest rate volatility, financing conditions and geopolitical uncertainty continue to influence valuations and sponsor-backed acquisitions, particularly for private equity buyers. Regulatory dynamics are also shaping activity levels across certain subsectors.
Changes in the level and focus of US regulatory enforcement in consumer finance and lending may influence transaction activity. Consumer-facing businesses nevertheless require heightened underwriting scrutiny because of compliance, regulatory and class-action exposure.
Outlook for 2026 and beyond
The outlook for financial services M&A remains broadly positive. Rather than a sharp rebound, the market is expected to see continued disciplined growth in transaction activity, with 2026 deal volumes expected to exceed both 2024 and 2025 levels across much of the sector.
Consolidation among RIAs, CPAs, alternative asset managers and fintech businesses is expected to accelerate, while appetite for more speculative sectors such as crypto will likely remain limited.
For R&W insurers, the financial services sector continues to offer attractive opportunities, particularly where businesses demonstrate operational maturity, regulatory discipline and scalable growth platforms. However, successful underwriting in the sector increasingly depends on nuanced understanding of regulatory exposure, governance and evolving dynamics across each subsector.
This article is provided for general information only and does not constitute legal, financial or insurance advice. Views and market observations are given as at the date of publication and are subject to change. Insurance appetite, availability and terms are subject to individual underwriting and applicable policy terms and conditions.
