Fidelity Clearing & Custody Solutions says $136 billion in assets is changing hands among IBDs as a result of five deals so far in 2017 — substantially more, 70%, than the $80 billion of assets moving as a result of 82 RIA deals among RIAs during the same time period.
In its Insights from Independent Broker-Dealers report, released Thursday, the authors stress that five large IBDs with more than $10 billion in assets “are helping to shape the IBD channel into a concentration of a small number of large firms.” The top 10 IBD firms, in fact, now manage 65% of all broker-dealer assets and 48% of BD advisors, according to research done by Cerulli Associates and cited by Fidelity.
IBDs had some $3.2 trillion of client assets under advisement as of 2015, while RIAs had about $2.2 trillion, Cerulli said in a 2016 report. RIAs, though, have been growing assets at 11.3% annually in the past decade, while IBDs did so at a 7.5% yearly clip.
“There are many emerging multibillion-dollar RIA firms, but they are still far behind the significant scale of the largest independent broker-dealers, which have substantial assets and advisor bases,” said Scott Slater, vice president of practice management and consulting for Fidelity Clearing & Custody Solutions, in a statement.
Thus, though there are fewer IBD deals vs. RIA transactions, the broker-dealer M&As “are significant, both in size and in how they are creating innovative business options and platforms for advisors,” Slater explained.
For instance, LPL Financial said in August that it had bought the advisors and assets of National Planning Holdings’ four IBDs, which had some $120 billion in assets. Also in August, Atria Wealth Solutions struck a deal to buy CUSO Financial Services and Sorrento Pacific Financial, which had $30 billion of combined client assets.