Slower second half doesn't derail record pace of RIA acquisitions

Echelon Partners expects 202 deals in 2018; average deal size could top $1.4 billion

Jan 22, 2018 @ 1:57 pm

By Jeff Benjamin

Despite a second-half slowdown, merger-and-acquisition activity set another record in 2017, according to the latest data from Echelon Partners.

The report, released over the weekend, showed 168 registered investment adviser deals for the year, a 22% increase over the 138 deals in 2016.

Broken down by quarter, there were 41 deals in the final three months, 35 in the third quarter, 45 in the second quarter, and 47 in the first quarter.

One of the byproducts of continued consolidation activity in the RIA space is the average deal size was above $1 billion for the second straight year.

Since 2013, when the average deal size was $456 million, the average has grown at a 22% compound annual growth rate.

Daniel Seivert, Echelon founder and chief executive, estimated that the current growth trend could see 202 deals in 2018, with the average deal size exceeding $1.4 billion.

Strategic acquirers and consolidator firms continued to dominate M&A activity, representing 44% of all deals last year, up from 40% in 2016.

Acquisitions by other RIAs was the second most-active category, representing 36% of deals, compared with 42% in 2016.

Breakaway broker activity picked up in the fourth quarter to 121 moves, compared with 107 in the third quarter, and 72 in the second quarter.

But, even in the wake of late-year departures from the broker protocol agreement by Morgan Stanley and UBS, the breakaway numbers in the final quarter didn't surpass the 123 moves in the first quarter.

Mr. Seivert described the accelerated fourth-quarter activity as "noteworthy," because the final quarter of the year has historically seen an average of 93 moves since 2013.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

What's behind the TCA, ETrade deal?

Deputy editor Bob Hordt talks with senior columnist Jeff Benjamin about what each party in the recent acquisition stands to gain by joining forces.

Latest news & opinion

HighTower on prowl for new CEO, Weissbluth to become chairman

Move is latest in Chicago-based RIA consolidator's effort to expand senior leadership team.

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

As Ameriprise case shows, firms on hook when brokers go bad ​

The SEC will collect $4.5 million from the brokerage firm for failing to supervise brokers who were ripping off clients.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print