RIA Rising

Schwab sees bigger RIAs in M&A market

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Bigger registered investment advisors are playing in the M&A game, according to Schwab Advisor Services. The custodian, serving nearly 7,000 RIAs, reports today there were 27 acquisitions in the first half of 2011, representing $20.8 billion in assets under management. That compares with 30 deals in the first half of 2010 representing $12.4 billion in AUM. See the complete story on the Schwab report here.

The sellers were either RIAs or breakaway brokers who joined RIAs for consideration, said David DeVoe, managing director of strategic business development at Schwab Advisor Services. Forty-four percent of the buyers this year were RIAs, with 22 percent consolidators and 23 percent banks. For all of 2010, 52 percent of the buyers were RIAs, 42 percent were consolidators, and just 1 percent were banks.

A greater proportion of firms with AUM of $1 billion or more were in the M&A market this year, DeVoe added. Assets under management in the average deal in the first half of 2011 were $770 million, compared to $412 million for the first half of 2010.

Schwab changed the methodology for measuring M&A deals to exclude institutional players such as hedge funds and separate account managers. The deals in the data released today involve only firms that predominately serve high-net-worth retail investors, firms with at least $50 million in AUM, and breakaway brokers from wirehouses who received consideration for joining an RIA.

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