January 28, 2013

RIA M&A Grew 30% in 2012, With Most Deals Done by Big Firms: Schwab

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

The total value of independent RIA mergers and acquisitions increased 30% in 2012 compared to 2011, with assets under management of 45 deals in 2012 totaling $58.8 billion versus $43.9 billion for 57 deals in 2011, according to data compiled by Schwab Advisor Services.

National acquiring firms, like HighTower, Focus Financial and United Capital remained the dominant buyers, finishing the year with 25 of the 45 total M&A deals, Schwab reported on Monday.

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.

Jon Beatty, Schwab Advisor Services“The independent model has become a destination of choice for both advisors 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 (left), senior vice president, sales and relationship management, Schwab Advisor Services, in a statement.

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

”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.

Schwab Advisor Services’ releases its RIA M&A report every quarter. Its transition services unit helps advisors with succession planning.

Read Institute for Fiduciary Standard founder Knut Rostad’s comment, HighTower Advisors: The New Face of Fiduciary?, and HighTower CEO Elliot Weissbluth’s video response, at AdvisorOne.

Reprints Discuss this story
This is where the comments go.