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Size of RIA Deals Up 45% in 2017: Fidelity

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Fidelity says M&A in the wealth management space should be robust this year, according to a report. At its recent M&A Leaders Forum in Boston, industry watchers said there should be “accelerating consolidation” in 2018.

The biggest deal in 2017 was LPL Financial’s purchase of the National Planning Holdings broker-dealers, which included about $120 billion of client assets. Another large transaction was Focus Financial’s deal with SCS Capital, entailing about $16.5 billion of client assets.

Other firms that dominated the M&A landscape last year were Focus Financial (17 deals), Dynasty (15), HighTower (12), First Republic (5), Mercer (4), Snowden Lane (4), United Capital (3) and Kestra (3).

To understand what the year ahead could hold for dealmaking, Fidelity highlights these M&A trends that dominated 2017:

  •  There were 109 individual transactions totaling $265.5 billion.
  •  RIA transactions accounted 104 of the deals, but only about 40% of the total value of the transactions.
  •  The RIA deals totaled $99.6 billion, up 45% from $68.5 billion in 2016.
  •  Strategic acquirers and wealth management RIAs completed more than 80% of the 2017 deals, up from 67% in 2016.
  •  The independent broker-dealer transactions numbered just five in 2017, but totaled a combined $165.9 billion of client assets.

More Facts

Nearly half of the 2017 M&A deals involving RIAs took place in five states — California (14), New York (12), Texas (9), Florida (6) and Massachusetts (6).

Wealth management breakaway groups — generally meaning wirehouse or employee advisors leaving national broker-dealers to go independent — accounted for 42% of last year’s RIA deals.

The majority of these M&As, 58%, involved sales by RIAs.