The Markets January 25, 2012

RIA Deals Increased in 2011

Registered investment adviser (RIA) deals increased in 2011 despite a decline in the overall number of deals, according to an industry-wide RIA mergers and acquisitions transaction report from Schwab Advisor Services.
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There were 57 mergers and acquisition (M&A) deals involving RIAs for the full year 2011, representing approximately $44 billion in total assets under management (AUM). The average deal size in 2011 was $798 million, the lowest average since 2005. In contrast, there were 70 deals in 2010 representing $63 billion in AUM, with an average deal AUM size of $895 million.

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RIAs were the leading acquiring category, rising from 37% of transactions in 2010 to 44% in 2011.

“Market volatility and economic uncertainty led to a decline in M&A activity in the second half of the year,” said Nick Georgis, vice president of Schwab Advisor Services. “RIAs remain the dominant buyer category, but we observed a measurable increase in the number of transactions completed by banks.”

Of the 57 deals tracked by Schwab in 2011, 58% percent of deals represented less than $500 million in AUMs, 33% percent of deals were between $500 million and $2 billion, and 9% percent of deals were greater than $2 billion.

Schwab began tracking M&A transactions in 2004.

 

Products January 25, 2012

Commonwealth to Continue Adviser Coaching Program

Commonwealth Financial Network’s Power in Practice business development coaching program will continue in 2012.  
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Power in Practice was designed for Commonwealth advisers. The year-long inaugural intensive allowed advisers to lead their organizations toward their own specific goals, providing the infrastructure, guidance, tactical steps and built-in accountability advisers need to refine their business plan and enhance their competitive edge. The program was led by Commonwealth’s Managing Principal of Practice Management, Joni Youngwirth.

In the year-long inaugural program, 40 advisers worked together in two peer groups. According to Commonwealth, participating advisers generating between $200,000 and $475,000 in 2010 gross dealer concessions (GDC) and increased 2011 revenue by a weighted average of 24% more than advisers generating the same 2010 GDC who did not participate in the program. Participants generating greater than $475,000 in 2010 GDC (which included several million dollar-producing offices) increased 2011 revenue by 44% more than those in a similar revenue range who did not participate in the program.

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“Our program was designed for the adviser who wants to evolve from a practice into a true business,” said Youngwirth.

The Power in Practice curriculum incorporated a series of peer workshops, one-on-one coaching sessions with Youngwirth and best-practices peer calls. Each participant set a goal of implementing a minimum of 10 best practices in his or her business by year-end, thereby instituting a system to efficiently manage the practice on an ongoing basis.

Power in Practice will continue in 2012 with 40 new participants. For more information, visit www.commonwealth.com.

 

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