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RIA Acquisitions are Bigger Than Ever, Fidelity Study Reveals

By Garrett Keyes December 18, 2018

The average size of an RIA up for sale is larger than ever, says Scott Slater, M&A specialist and VP of practice management and consulting for Fidelity -- but the number of purchases has decreased.

There have been 84 RIA transactions totaling approximately $109 billion from the beginning of 2018 through November, a recent Fidelity study shows. In 2017 there were 99 RIA acquisitions totaling only $99 billion, the 2017 study reveals.

“Larger RIA firms have recognized the need to build out their platforms not just around technology and service offerings, but to provide better solutions to clients,” Slater says. Large RIA firms are also trying to build “recognized national brands,” he says. And adding firms in different geographic locations can help extend an RIA’s reach.

Mercer Advisors recently acquired $600 million Financial & Investment Management Group for this reason, vice chairman and M&A leader Dave Barton recently told FA-IQ.

The end of 2018 also brought a wave of acquisition activity. November saw nine RIA transactions representing nearly $17 billion. Only four transactions representing about $8 billion were recorded in November of 2017.

In fact, very few transactions occurred in the RIA space until the fourth quarter, Slater says. For instance, Mercer Advisors alone recorded four acquisitions in November of 2018.

Slater says M&A activity won’t slow with the end of 2018 because markets are driving RIA acquisitions. “I have been saying to expect more acquisition activity for some time now, and it’s really a seller’s market right now. The market has been volatile and RIA sellers recognize this is a good window to merge.”

But the RIA acquisition space will not see a drastic uptick in activity.

“[The uptick] won’t be dramatic, but activity will pick up in 2019,” he affirms.