Data & Research June 27, 2023

Fidelity Sees Jump in Quantity, Value of RIA M&A Deals Since 2020

During the last three years, 492 transactions took place, compared to 146 during a similar period from 2017 through 2019.

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The last three years have seen a significant increase in the quantity and asset value of registered investment adviser M&A deals, with the median AUM of acquired firms increasing from $250 million to $400 million, according to a recent study from Fidelity Investments.

Fidelity’s 2023 M&A Valuation & Deal Structure Survey compared the 39-month period from January 2020 through March 2023 with a 31-month period from January 2017 through July 2019 and found that the more recent period had 492 reported transactions, up from 146 for the earlier period.

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The study surveyed serial acquirers involved in nearly 500 deals over the last three years. They accounted for virtually 75% of all RIA transactions during that time.

Aggregators buying RIAs include OneDigital’s recent acquisition of $3.8B retirement and wealth shop StoneStreet Equity. The deal is the fourth retirement and wealth acquisition of the year for OneDigital. Workplace retirement plan advisers are part of the RIA binge: OneDigital, Hub, Captrust and NFP all recently brought on an RIA.

“Despite market headwinds, the wealth management industry continues to be a vibrant space for M&A, with the environment rewarding high-quality firms with strong multiples,” Laura Delaney, Fidelity’s vice president of practice management and consulting, said in a statement. “Although activity has increased substantially vs. the previous study period, it’s important for RIA business owners to align on valuation drivers and understand the dynamics involved in the motivations and expectations of buyers and sellers.”

Deals have been closed at a faster pace, with an average deal completion time of roughly seven months, down from nine months during the 2017 to 2019 period.

Buyers reported walking away from roughly half (52%) of evaluated deals. Respondents cited as key factors the misalignment of: valuation expectations (87%), culture (73%) and vision (50%).

“The nature of deals will continue to evolve,” said Delaney. “We’re seeing strategic acquirers become increasingly efficient which is reflected in reported deal completion time; however, opportunity can be left on the table due to misalignment of dealmaking fundamentals. There’s an element of emotion behind every transaction.”

Fidelity’s study was conducted from February 13 through March 28 and covered M&A deals from January 2020 through March 2023. Its 2019 study covered M&A deals between January 2017 through July 2019. Four center of influence firms and 26 RIAs participated in the survey.

Deals & People June 27, 2023

Voya Chief Client Officer Exits

William Harmon is leaving the recordkeeper, with two senior leaders taking up the role of outreach to advisers and plan sponsors.

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Voya Financial is shuffling its team of client-facing retirement product distribution personnel, as its chief client officer, William Harmon, will step down from the role on Friday, a spokesperson confirmed this week, after six years at the firm.

The Voya spokesperson praised Harmon’s contributions to the firm.

“Given the success Bill has achieved in creating a structure, strong culture and setting the teams up for success, he will be leaving Voya at the end of June,” the Voya spokesperson wrote in an email. “Bill has exemplified what it means to take a holistic approach to serving clients, helping Voya both grow and retain clients during his tenure at the company. In doing so, he has helped to successfully establish a strong sales and distribution team that is aligned and well-positioned to succeed to advance our growth plans.”

Brad Galiney, senior vice president and head of health solutions distribution and client engagement, and Doug Murray, leader of wealth solutions and client engagement, will combine to fill the role, according to the spokesperson.

Galiney, Murray and their teams, “will leverage all that has been built to advance Voya’s growth plans and will remain focused on growing Voya’s workplace strategy, which is centered on addressing our customers’ health, wealth and investment needs through the workplace and institutions,” the spokesperson wrote.

“Our focus remains on continuing to serve the workplace savings and benefits needs of all our customers and partnering closely with them and intermediaries,” the spokesperson added. “We have both significant scale and great distribution relationships that give us confidence to meet the needs of all our customers—both through the products and solutions that we offer today, as well as further capabilities that we are developing, and in doing so remain encouraged by the market interest in our workplace strategy.”

Harmon joined Voya in 2017 as president of retirement for the corporate market.

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