Investment advisory boutiques were the ones that best weathered the margin compression that hit the sector in 2025. In aggregate, the EBITDA margin of law firms fell from 13.22% in 2024 to 12.16% in 2025. During the same period, small firms moved in the opposite direction: they increased their margin from 11.17% to 14.5%.
This data is part of the 2026 Annual Sector Report from the consulting firm AAWZ, which analyzed its more than 150 investment advisory and consulting partners and shared it exclusively with NeoFeed .
And it dismantles the thesis that has guided much of the consulting industry in recent years: that gaining scale and becoming a large platform was the natural path to survival.
The new picture of the sector shows a more complex dynamic. In a more difficult acquisition environment, with more wary clients, a drop in profitability (ROA), and greater questioning of the commission-based model, leaner structures have proven more resilient than many large and medium-sized firms.
According to the report, the average cash flow of law firms fell from R$1.3 million in 2024 to R$1 million in 2025. “The entire advisory market suffered from image problems,” says Filipe Medeiros, CEO of AAWZ. “Larger agencies were more affected by image problems, asset losses, and conflict of interest issues. But boutiques were less affected because they are much closer to the client.”
The consultancy considers boutiques to be companies that work with up to 10 investment advisors, all of whom are generally significant partners. Medium and large firms, on the other hand, have between 10 and 100 professionals, plus a support structure such as fixed income, equities, and other vertical trading desks.
The giant advisory firms, on the other hand, are one-stop shops with over 300 advisors. Custody, however, doesn't determine much, as it depends on the client profile served.
A financial indicator that clearly shows the resilience of boutiques is the Cash/SG&A ratio, which shows how much cash the operation has to pay fixed, administrative, and commercial expenses. In practice, it measures the firm's financial breathing room to sustain its structure during periods of lower revenue.
Boutique firms were the only ones to improve in this indicator last year. Among small firms, the Cash/SG&A ratio rose from 2.1 times to 2.9 times between 2024 and 2025. In large firms, it fell slightly, from 2.7 times to 2.6 times. In medium-sized firms, the drop was more intense: from 2.3 times to 1.8 times.
For Medeiros, the key point lies in the difference between fixed costs and profitability in relation to them. “When revenue falls, profit falls, growth falls, and there is a loss of clients. But the fixed structure remains fixed. So, the cash flow burns. In a boutique structure, the biggest cost is variable, the commission for the consultants. While the fixed structure is very small, so it doesn't move the needle as much.”
Free cash flow reinforces this reading. Across the sector as a whole, the free cash flow margin worsened from -2.99% in 2024 to -3.78% in 2025. In large offices, it went from -0.54% to -1.26%, in medium-sized offices, it went from -6.31% to -2.33%. Meanwhile, in boutique offices, it improved from 2.54% to 3.70%.
In a sector that grew for years supported by hiring, opening branches, recruitment targets, and expanding teams, the current environment has begun to demand a discipline that not all models have developed at the same pace, due to the slowdown in growth.
According to Medeiros, net inflow remains positive, but the relative growth in 2025 was lower than in 2024, which had already been lower than in previous years. He says the slowdown is directly related to the sector's image crisis and the loss of customer appetite for more commission-based products.
“Customers are less receptive to switching products at a time when there’s a product problem in the news every month,” he says. “It’s harder to go out and sell high-commission products these days.”
In this scenario, proximity has become a competitive advantage. For Medeiros, a boutique firm is more like a doctor's office: most of the client portfolio is in the hands of the founders, the relationship is direct, and communication with the client is simpler. In a larger structure, the portfolio is spread among advisors, leaders, and processes.
"It's much easier to solve a customer communication problem in a small company than in a larger company, which has many more people to derive the narrative, the conversation, and the day-to-day processes from," he says.
The growth of boutiques is a market trend.
This set of changes points to a possible reorganization of the sector. Instead of pure consolidation, with large companies buying smaller ones until the number of companies is reduced, Medeiros sees two different possibilities: the giants getting bigger, and the emergence of more boutiques and independent consultancies.
"Those who will lose size and structure are the medium and large businesses, especially those who don't adjust their fixed costs. Those who try to be big and fail are the ones who go bankrupt. Boutiques, on the other hand, are always profitable and don't go bankrupt," says Medeiros.
The analogy Medeiros uses to explain this shift is that of the "hospitalization" of the market. In recent years, he says, the idea was created that every advisor needed to build a large structure, with a partnership model, constant hiring, and an ambition for consolidation. Now, part of the industry is beginning to return to a model closer to "investment consulting firms."
“Not every doctor has to own a hospital. In other words, not every advisor has to be the CEO of an advisory firm,” he says. “Many people are returning to having their investment consulting practices because they understand that this model is often better for the client and perhaps healthier in the long run.”
The market in the United States has moved in exactly that direction. According to data from the IAA Industry Snapshot report, with SEC data from 2025, approximately 93% of RIAs there are boutiques, employing about 54% of the market's professionals. There, some consultancies focus on serving only a specific audience, such as doctors and lawyers.
In Brazil, this movement is still in its early stages, but it could gain momentum in the coming years. For now, specialized companies are emerging to serve the agribusiness sector, which has very distinct demands. But maturation should lead to other specializations.
“The consulting market is undergoing a model test. And this test shows that scale remains important, but it doesn't replace proximity, specialization, efficiency, and cost discipline,” says Medeiros.
