Recent M&A data for RIA firms show that while overall deal flow is down, according to both Schwab and Pershing, M&A activity is being driven by RIA shops buying colleagues, not by large consolidators. RIA-to-RIA deals accounted for 58% of the transactions, according to Pershing, up from just 37% in 2012, while 25% of the deals were completed by consolidators, down from 29% last year. The firms covered had at least $50 million in AUM or $500,000 in revenue.
Acquisitions continue to be driven by a desire to enter fresh markets and gain access to new capabilities, as well by succession planning. For many sellers, an active owner is more attractive, especially if the seller intends to stay with the business — and RIA buyers are getting smarter at making deals. Flow is down because markets are good and advisors are busy.
