National Acquiring Firms Keep Driving M&A Activity

Mergers and acquisitions for registered investment advisers (RIAs) saw a 30% rise in the total value of transactions year over year, according to Schwab.

Industry-wide data about RIA mergers and acquisitions compiled by Schwab Advisor Services for year-end 2012 underscores the growing size and strength of this model, according to the firm.

The assets under management of the 45 deals completed in 2012 totaled $58.8 billion versus $43.9 billion for the 57 deals in 2011. 

“The independent model has become a destination of choice for both advisers and high-net-worth investors alike, and the growth in the overall size of the deals we saw in 2012 is proof that this is a model that is growing and flourishing,”  said Jon Beatty, senior vice president, sales and relationship management, Schwab Advisor Services.

“It also points to a new inflection point for the industry, as RIAs appear to be actively considering M&A as a way to grow their business, and as a component of their succession planning efforts,” Beatty said. 

 National acquiring firms remained the dominant buyer category, finishing the year with 25 of the 45 total M&A deals. Meanwhile, the proportion of acquisitions by RIAs dropped in 2012, down from 44% of the total deals closed in 2011, to 20% of those completed in 2012.

“National acquiring firms are proving to be a good overall alternative for the growth of the industry, attractive to both advisors that are looking to join the move to independence or RIAs that are seeking to expand their footprint or execute a succession strategy,” Beatty said.

Activity among national acquiring firms remained high for the third consecutive quarter in 2012, representing 55% of the deals completed throughout the year.

Schwab Advisor Services produces its RIA mergers and acquisitions report quarterly.

Additional information is available here.