Schwab Reports RIA M&A Activity for Q1 2011

The first quarter of 2011 was slightly less active than the first quarter of 2010, when 25 M&A deals transpired.

“The data reflects a strong first quarter and continued M&A momentum, off only slightly from the record set during 2010,” said David DeVoe, managing director of strategic business development for Schwab Advisor Services (see “2010 Record Year for RIA M&A“). “The continued growth of the equity markets and the overall RIA industry helped create fertile ground for mergers and acquisitions in Q1. On a broader scale, RIA M&A is being driven by structural changes to the industry, such as the demographics of adviser principals on the seller side, and the continued investment from consolidators, private equity firms, and others on the buyer side.”

The 23 total RIA transactions sold in first quarter 2011 represent approximately $20 billion in total assets under management, Schwab reports. Of the 23 transactions, RIA firms were the most dominant acquirer category, accounting for more than 50% of acquisitions, a trend that has continued since 2009. The number of acquisitions by RIAs underscores their growing sophistication and reflects efforts to use M&A as a way to achieve business goals and objectives, the report concludes.