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RIA M&As at New Record, But Transactions Smaller in 2017

January 23, 2018

The number of mergers and acquisitions in the RIA space reached a new record in 2017 but the average deal size went down around $120 million, according to research from DeVoe & Co. cited by InvestmentNews.

There were 153 deals last year, but the average deal size went down from more than $1 billion in 2016 to $881 million in 2017, the publication writes. Mergers and acquisitions activity was “stopped abruptly” in the second half of the year when the Department of Labor delayed its fiduciary rule, David DeVoe, the research firm’s managing director, tells InvestmentNews. And the impact of Morgan Stanley and UBS withdrawing from the Protocol for Broker Recruiting is only now beginning to be felt, Devoe tells the publication.

Consolidator firms were behind 50% of the RIA deals while RIA acquirers accounted for 31% of the deals in 2017, compared to 28% in 2016 and 46% in 2015 for RIA acquirers, according to the report cited by InvestmentNews. Banks, meanwhile, were behind 8% of the deals, compared to 3% in the previous two years, the publication writes.

In the first two weeks of 2018 DeVoe has already counted at least five sub-acquisition deals made by affiliates of consolidator firms, he tells InvestmentNews. That segment is likely to be active in 2018 after a slight drop last year, the publication writes. There were 19 such deals in 2016 but 17 in 2017, according to DeVoe’s report.

Among other deals made this year is Private Ocean’s acquisition of Lakeview Financial Group, FA magazine writes. The Seattle-based RIA oversees $360 million and will continue operating out of its current location as Private Ocean, according to the publication.

Devin DeStefano

The deal expands Private Ocean’s reach to the West Coast, Greg Friedman, the company’s CEO, says in a statement cited by FA magazine.

The Marin County, Calif.-based Private Ocean is itself a product of a 2009 merger of Salient Wealth Management and Friedman & Associated, according to the publication. The firm caters to investors with at least $2 million in liquid assets and oversaw $1.2 billion at the time of the acquisition, FA magazine writes.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.
  • To read the FA Magazine article cited in this story, click here.