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 > RIAs

Wealth Management M&A Deals on Track to Top 200 This Year

Your article was successfully shared with the contacts you provided.

The wealth management M&A market remained robust in the second quarter, with a record 52 transactions recorded by Echelon Partners M&A deal tracker.

Deal making is now on track to surpass 200 transactions this year, a record, Echelon reported Monday. The report noted that M&A activity within the RIA community is on a “multi-year bull trend” that shows no evidence of weakening.

Midsize RIAs, those with assets between $300 million and $1 billion, drove activity during the second quarter despite volatility in capital markets. These firms, Echelon said, are using inorganic growth strategies to achieve operational efficiencies, reach scale and free up capital to invest in people and technology.

According to the report, RIAs have become more acquisitive this year with 36 RIA-to-RIA deals so far, reversing a three-year decline in market share of M&A transactions. If the trend continues, this category will increase by 132% year-over-year in 2019.

After a dip in this year’s opening quarter, breakaway activity surged to 192 in the second quarter, on pace for 572 by year-end, a 6.5% increase over last year’s record for breakaways.

In two mega-transactions, five partners left First Republic’s private bank, taking $17 billion with them. Two advisors are forming Evoke Wealth in Los Angeles, and three are starting IEQ Capital in Palo Alto, according to Echelon.

Sources, unidentified in the report, told Echelon that 50 members of First Republic’s wealth management division were set to join the new firms.

The report said several factors were driving breakaway activity: an aging advisor demographic, desire for liquidity, a mature business cycle and wide availability of financing programs.

Echelon projects 48 $1 billion-plus wealth management M&A transactions this year, a 50% increase over last year’s total. It also projects eight $1 billion-plus breakaway deals, half the 2018 total.

— Check out What to Do Before You Sell Your Practice on ThinkAdvisor.


© 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.