Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Industry Spotlight > Broker Dealers

RIA M&As on a 5-Year Growth Tear: Echelon Report

Your article was successfully shared with the contacts you provided.

Investment bank Echelon Partners says merger and acquisition activity in the RIA industry is on pace for a 23% year-over-year increase in 2017, based on activity through Sept. 30. That would make it a fifth straight recodord-setting year for deals, according to Echelon Partners.

The third-quarter Echelon RIA M&A Deal Report found that 302 advisors had moved out of the wirehouses so far this year, with 88 more expected to leave in the fourth quarter.

Plus, the average size of these breakaway moves is expanding: It has risen 7% from last year to $300 million in client assets per advisor, with 15 breakaways involving advisors with $1 billion or more in assets through the third quarter, according to Echelon.

The group also sees wirehouse advisors continuing to break away to form or join RIAs due to lower recruiting bonuses that have resulted from the Labor Department fiduciary rule.

“The aging advisor population combined with consolidation at the top end of the industry is leading to increasing volumes of deals, both in total numbers as well as in assets,” said Echelon CEO Dan Seivert in a statement.

Source: Echelon Partners

Big PE Moves

KKR and Stone Point Capital’s $100 billion acquisition of a major stake in consolidator Focus Financial is one of the industry’s largest “mega-deals” made by private equity investors, Echelon reports.

The pipelines of many consolidators and private equity buyers is becoming full, according to the investment bank. This means these firms are increasingly “seeking and finding established businesses that fit an attractive profile for their investment criteria of large deals.”

“In search of growth platforms and scale, well-capitalized, strategic buyers and consolidators have accounted for 53% of RIA purchases thus far in 2017, 33% greater than in 2016,” Seivert explained.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.