RIA M&A sets another record in 2018

Consolidators continue to gobble up independent firms

Jan 14, 2019 @ 1:04 pm

By Jeff Benjamin

The financial market volatility that picked up in earnest last year was not enough to derail the pace of consolidation among registered investment advisers.

Echelon Partners reported Monday that merger and acquisition activity in the RIA space posted its sixth straight year of record growth in 2018.

There were 181 deals last year, 13 more than the record set in 2017. The full-year deal count was more than double the 90 acquisitions tracked by Echelon in 2013, when it began tracking this kind of activity.

The quarterly pace of deal activity was steadier than in prior years, including 44 deals in the fourth quarter, which marked the best final quarter of the year since 2013.

Last year also marked another milestone: There were more than 40 deals in each quarter, including 43 in the third, 48 in the second and 46 in the first quarter.

The average deal size of $1.3 billion last year was also a record and was up 31% from the average deal size in 2017. Last year also marked the third consecutive year with an average deal size above the $1 billion mark.

In terms of the acquiring firms, strategic buyers and consolidators were responsible for 47% of the activity, followed by RIAs at 28%.

Over the past five years, the trend has seen consolidators make up a larger share of deals, while the RIA share has declined. RIAs peaked in 2013, when they made up 47% of buyers, while consolidators made up 31%.

Breakaway broker activity also continues to trend higher, according to Echelon.

The 147 breakaways in the fourth quarter was the highest level since the outlier of the second quarter of 2016, when 176 brokers left wirehouses for the RIA channel.

The fourth-quarter breakaway activity represents a 35% spike above the historic average for breakaway activity and followed 139 moves in the third quarter, Echelon reported.


What do you think?

View comments

Recommended for you

Featured video


Financial therapy fills the gap between money and emotions

Most clients have complicated relationships with their finances, according to Rick Kahler, founder of Kahler Financial Group, and financial advisers can help.

Latest news & opinion

Finra suspends former star LPL rep who borrowed client cash

Regulator says James E. 'Jeb' Bashaw borrowed $200,000 from a client in 2013 without telling LPL.

Higher tax bills following reform surprise clients

Lower withholding and the loss of state and local deductions throw many for loop.

Centerbridge said to be in talks to buy Advisor Group

Advisor Group's independent broker-dealer network in the U.S. has more than 7,000 advisers.

The drawback of Richard Thaler's 401(k)-Social Security idea? Social Security itself

Observers think Congress would need to address Social Security's funding levels and offer enhanced protections for the concept to work

Social Security funding outlook improves slightly

Retirement reserves extended one year; disability fund by 20 years


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.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print