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RIA Mergers Expected to Rise

Schwab Advisor Services reports an increase in the size of RIA deals in 2012, while the number of deals decreased. The total value of RIA deals increased from $43.9 billion in 2011 to $58.8 billion last year, but the number of deals dropped — from 57 to 45 — led by national firms like Hightower, Focus Financial and United Capital.

Some experts are predicting more activity in 2013, as the overall sector grows and many principals deal with growth and succession issues — as reflected in a recent flurry of deals by Gallagher. The owners of about half of the 20,000 firms in the RIA market are nearing retirement age and may want to act soon. In fact, one consultant said that many small deals are not even reported — which would greatly increase the number if not the value of deals. But others say that there will be more “dating than mating” since firms don’t know their value when approached and usually overestimate how much they’re worth.

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