Echelon: RIA M&A slowdown not due to fewer breakaway advisers

Consultancy counts 35 deals in the third quarter compared to 47 and 45 in the first two quarters respectively, but sees the latest tally as more in line with long-term trends.
NOV 15, 2017

A new report from Echelon Partners confirms that merger and acquisition activity among independent advisory firms was slower in the third quarter of 2017, but doesn't attribute the dip to a decrease in the number of reps leaving brokerage firms. Instead, Echelon writes that the pace of M&A activity in the third quarter was more of a return to averages after an accelerated start to the year. The 47 deals made in the first quarter of 2017 and 45 made in the second were two of the three highest quarterly deal totals since 2013. The 35 deals recorded in the third quarter is a greater total than 70% of the previous 19 quarters, including the 33 deals made in the third quarter of 2016. Echelon believes 2017 will cement itself as the fifth record-breaking year of M&A activity in a row, and that industry trends will only continue the trend. Echelon's report dismisses the idea of a slowdown in the number of breakaway advisers. The second quarter of 2017 was the lowest number of breakaways since 2013, but it was preceded by the second-highest quarter in that time frame. The third quarter was more in line with the average, with Echelon tracking 107 advisers going independent. Another continuing trend is the average size of deals, highlighted by KKR and Stonepoint Capital's acquisition of $100 billion AUM firm Focus Financial. Echelon attributed the growth of these "mega deals" to the growing presence of private equity and strategic buyers looking to acquire an established business structure with a proven ability to generate cash flows and profits. Over the first three quarters of 2017, the average transaction size reached $1.1 billion. (More: Private equity eyes advisory firms, but at what cost?) "The aging adviser population combined with consolidation at the top end of the industry is leading to increasing volumes of deals, both in total numbers as well as in assets," Echelon CEO Dan Seivert said in a press release.

Latest News

Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team
Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team

LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.

M1 Advisor bets AI can serve clients wealth managers turn away
M1 Advisor bets AI can serve clients wealth managers turn away

The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.

SEC charges Caris Investment Partners in alleged cherry-picking scheme
SEC charges Caris Investment Partners in alleged cherry-picking scheme

95.8% of house trades were winners. For clients? The SEC says just 14.9%.

Pension fund accuses Duolingo of burying user-growth crisis
Pension fund accuses Duolingo of burying user-growth crisis

The complaint says Duolingo added friction on purpose, then lied about it.

Wirehouses losing more advisors so far in 2026: Report
Wirehouses losing more advisors so far in 2026: Report

The four wirehouse firms lost 1,449 experienced advisors and recruited 932 in the first six months of the year, according to Diamond Consultants.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor