Number of RIA deals down in 2017, new report says

Advisory firm merger and acquisition activity declined for the second straight year, but still ranked as the third-strongest year on record, according to TD Ameritrade Institutional's latest benchmarking report released Thursday. The pace of deals throughout the first three quarters of the year was on track to beat 2016, but activity slowed in the final three months of the year, the report noted. The year wrapped up with 70 deals targeting independent advisory firms, including 10 in the fourth quarter. That compares with 80 deals in 2016, and 85 total in 2015. The benchmarking research attributed the late-year slowdown in activity to "numerous forces," and added that advisers reported a "surge in client calls and meetings concerning the impact of a sweeping tax bill," which was signed into law during the last week of December. While the total deal count was down, the total volume of assets acquired rose by 32% over 2016 to $114 billion, also the third-highest on record. The average deal size in 2017 of $434 million represented a 35% increase over 2016. For the first time in the 17-year history of the research report, RIA multi-dealers initiated more transactions than any other type of buyer. The category, defined as registered investment advisory firms that employ routine transactions as part of a growth strategy and initiate at least three deals in a five-year span, made up 29% of all deals last year.