RIA deal activity subdued in 2012 amid uncertain economy, shaky markets

Mergers and acquisitions involving RIA firms remained subdued last year as buyers and sellers held off in the face of an uncertain economy and fragile markets, according to Pershing Advisor Solutions LLC. In 2012, 35 transactions involving RIAs were completed, just two more than in 2011 and well shy of the record 68 deals done in 2007. Last year would have been even slower if not for a “flurry of fourth-quarter activity, likely driven by fear of less favorable tax treatment in subsequent years,” Pershing Advisor Solutions said in its annual report, released today. “Few [players] have the confidence to follow through with a deal” while economic growth remains slow, the report said. RIA firms continue to play a larger role in the M&A space compared to banks, trust companies and aggregators, a trend that first emerged in 2008. In a more recent development, large RIA firms are becoming “serial buyers” of other RIAs, the report noted. Serial buyers are defined as those completing three or more deals in the last four years. In 2012, five of the 10 serial-buyer deals were initiated by an RIA making repeated acquisitions. Examples of this “new breed of RIA serial buyer” include Banyan Partners LLC, Mariner Wealth Advisors, and Buckingham Asset Management LLC, the report said. The RIA deals trend report is published by Pershing Advisor Solutions and produced by industry consultant FA Insight. The report tracks transactions of RIA firms with at least $50 million in assets under management or $500,000 in revenue.