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Industry Spotlight > Mergers and Acquisitions

M&A Activity Among RIAs on Track to Achieve All-Time High This Year: TD Ameritrade

By Jeff Berman

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The number of RIA mergers and acquisitions announced in the first six months of 2019 grew a whopping 82% from the same period last year, putting such transactions on track to achieve an all-time high this year, according to TD Ameritrade Institutional.

During the first two quarters of 2019, 69 RIA transactions were finalized, up from just 38 a year earlier, according to the firm’s FA Insight Mergers & Acquisitions 2019 Mid-Year Update.

Compared to annual totals, the number of deals so far in 2019 ranked as the fifth most active year for transactions dating back almost 20 years to the start of the FA Insight database in 2000, the firm said.

The findings didn’t come as a complete surprise because such transactions have been on the upswing for a while, with deal totals successively growing in each of the past four quarters. By the first quarter of this year, transactions reached a record quarterly high of 33, but were soon surpassed by a record 36 deals in the second quarter of 2019, according to TD Ameritrade.

The 69 deals in the first six months of 2019 represented a total of $57 billion, up 39% from the same period last year, with a median $413 million in assets under management in motion, the firm said. Independent RIAs took the lead, initiating three-fourths of all advisory firm deals in the first half, it said.

Meanwhile, although the number of one-off deals by RIAs grew in the period to represent almost 40% of transactions, RIA firms that engaged in multiple acquisitions continued to make their presence known with an increase in the total share of deals among them growing 36%, it said. Mercer Global Advisors alone announced four acquisitions in the first six months of 2019, while Wealth Enhancement Group’s partner firms announced three. Focus Financial Partners and its partner firms initiated 16 deals, representing 23% of first-half activity.

“The forces driving the accelerating pace of industry consolidation in recent years are now intensifying,” according to Pete Dorsey, managing director of sales at TD Ameritrade Institutional. “More than ever, independent advisors are leveraging acquisitions to fuel growth, pursue long-term strategic goals, and, in some cases, build national enterprises,” he said in a news release announcing the study’s findings. RIA deal activity has also “benefited from low borrowing costs and the rising number of firms willing to sell as valuations rise,” he said.

Unless there’s a downturn in the economic climate or securities markets, the industry is on pace to achieve new highs in M&As, according to TD Ameritrade.

— Check out Fidelity Announces Deal to Help Custody Clients Finance M&A on ThinkAdvisor.

Jeff Berman

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