Financial advisors are increasingly optimistic about the effects of mergers and acquisitions in the registered investment advisor space on their own practices, according to a new report.
Sixty-seven percent of advisors and financial professionals believe M&A activity in the space will rise in the next 12 months, Nationwide says it found in a survey of 1,632 advisors and financial professionals fielded from July 22 to August 17.
More specifically, 73% of RIAs and fee-based financial professionals, 74% of wirehouse financial professionals and 65% of broker-dealer financial professionals expect consolidation and deal making in the RIA space to continue rising, which is significantly more, across each channel, than did so last year, according to Nationwide.
At the same time, 54% of respondents believe that deal activity in the RIA industry will also have a positive effect on their own practices, up from 42% who said so last year, Nationwide found.
Advisors and “financial professionals in the wirehouse and broker-dealer channels are more bullish about M&A than we've seen in years,” Craig Hawley, head of Nationwide annuity distribution, said in a statement.
Wirehouse financial professionals are citing the chance to sell their business as the leading benefit of M&A for the first time, while those at broker-dealer firms cite it as the second most important benefit, according to Nationwide.
Among the other key benefits of M&As, respondents cite the ability to have better resources to serve clients, succession planning considerations and the opportunity to scale up, buy another firm or exit the business, the survey found.
At the same time, around 13% of respondents worry that heightened M&A activity will have negative impacts on their business, with price compression being the most cited threat, according to Nationwide.
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