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Industry Spotlight > Mergers and Acquisitions

RIA Dealmakers Start Year With a Bang: Fidelity

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Wealth management merger and acquisition activity was more robust in January than in any single month since Fidelity Investments began tracking in 2016, the firm reported Friday.

Twenty-three RIA deals, representing $47.8 billion in client assets under management, shot past the previous record of 17 set in December. In addition, January deals also surpassed the highest monthly assets under management recorded in November by $2.1 billion.

By way of comparison, total assets in 2016 M&A activity were $49 billion. 

Seven January deals involved sellers with upward of $1 billion in client assets, or 85% of the month’s assets under management.

Fidelity Institutional said that after significant consolidations in 2019 that led to a relatively quiet 2020, the independent broker-dealer space had three deals in January, totaling $23.9 billion. 

“We’re seeing the surge in M&A activity from the last half of 2020 accelerate into 2021,” Scott Slater, vice president of practice management and consulting at Fidelity Institutional, said in a statement. 

“In this very active market, it’s crucial that potential sellers determine their strategy, buyer characteristics, deal structure and timing that is right for their firm.”

Advice for Advisors

Fidelity Institutional laid out ways in which advisors can best position their firms for success in 2021, based on recent research

For one, it said technology has been thrust into the center of client engagement and is likely to remain there. Some seven in 10 investors say they are comfortable communicating and collaborating with their advisor only remotely. 

The research also showed that new opportunities exist for attracting clients. A quarter of advised investors either started working with an advisor or switched advisors during the pandemic. More than half of these investors were Gen Xers, indicating an opportunity for advisors to capture new long-term clients

In addition, remote work presents an opportunity to work with investors in different geographic locations. About a third advisors surveyed by Fidelity agreed that a remote work environment allowed their firm to pursue new clients who were previously too far away. 

Almost half of investors surveyed by Fidelity said they would be comfortable working with an advisor outside their local area.