A recent report by Tiburon Strategic Advisors found that mergers and acquisitions by registered investment advisors slowed quite a bit last year.
The number of M&As deals in the RIA space dropped to 18 as of September, compared with 45 for all of 2012, 57 in 2011 and a high of 70 in 2010.
However, these deals and other advisor-related MA&s should jump in 2014 due to the growing presence of roll-up firms or aggregators of financial advisors, the consulting group suggests. In addition, strategic buyers — namely CPA firms and banks — are expected to jump back into this M&A space, it says.
“Legitimate financial advisor aggregators have finally emerged,” Tiburon experts explain in their latest analysis of advisor M&As, released a weak ago. “Financial advisor aggregators and service providers are emerging to challenge the power and profit margins of the traditional independent financial advisor back-office service providers.”
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As of late 2013, there were at least 17 advisor aggregators, compared with fewer than 10 in 2009, the report notes.
Aggregators have completed some 220 cumulative transactions involving about $73 billion in total client assets under management. They account for about 30% of all fee-based financial advisor assets under management, up from 8% in 2003.