RIA M&As Keep on Chugging: Fidelity

Through the first 11 months of 2019, there were 11 IBD transactions, representing $628.7 billion in AUA, according to Fidelity. That was up 39% from the same period of 2018, which had eight transactions representing $453 billion in AUA, and up a whopping 268% from the first 11 months of 2017, when there were six transactions representing $170.7 billion in AUA, Fidelity said.

“We have been witnessing this steady acceleration of M&A activity all year,” according to Scott Slater, vice president of practice management and consulting, at Fidelity Clearing & Custody Solutions.

“Three things stand out this year: first, the majority of deals are completed by firms that have done multiple transactions in 2019,” he told ThinkAdvisor. “Second, there have been a number of highly visible deals as large firms such as Mercer Advisors and Wealth Enhancement Group have recapitalized, positioning them for more potential transactions,” he said, adding: “Third, while RIAs represent the most activity, the broker-dealer channel is up dramatically with several transformative transactions this year, as it experiences consolidation to drive scale.”

Fidelity “anticipated that 2019 would be a big year for M&A activity, and it’s certainly shaped up to be just that,” he went on to say. “Both the total number of transactions and the AUM for the year are significantly higher than they were in 2018, and I expect that the secular forces driving today’s strong activity — capital, the competition for both client-facing and leadership talent, and the need for scale — will continue into 2020,” he told ThinkAdvisor.

Following are the nine other RIA transactions that took place in November aside from Lovell’s investment in Pathstone:

• Rembert Pendleton Jackson bought by Sandy Spring Bank: $1.3 billion
• Vector Wealth Management bought by Bluespring Wealth Partners: $1.1 billion
• Laffer Investments bought by ButcherJoseph Asset Management: $600 million
• Advisors Katherine Forrester Schneewind and Michael Forrester leaving Northwestern Mutual to create High Note Wealth with Dynasty Financial Partners: $500 million
• OptiFour Integrated Wealth Management bought by Creative Planning: $400 million
• CI Financial takes majority stake in Surevest Wealth Management: $369 million
• Landmark Financial Advisors bought by Commonwealth Bank & Trust Co.: $335 million
• Cedar Rowe Partners merging with Homrich Berg: $309 million
• AL Hewitt bought by Mercer Advisors: $100 million.