2010 Record Year for RIA M&A

Schwab began tracking M&A activity in 2003; 2010 had the highest level of activity.  In 2009, Schwab tracked 70 deals.

The 109 transactions in 2010 represent approximately $156 billion in total assets under management (AUM), compared to approximately $103 billion in AUM in 2009, according to the company. The average transaction size in 2010 was approximately $1.4 billion compared to approximately $1.5 billion in 2009. RIA firms were the most common buyers among 2010 deals, accounting for more than 50% of acquisitions, a trend that has continued since 2007.

Fifty-eight percent of deals represented less than $500 million in AUM, 23% of deals were between $500 million and $2 billion, and 19% of deals were greater than $2 billion.

“We saw a significant uptick in M&A deal activity among RIAs in 2010, largely due to advisers putting these discussions back on the front burner after spending the bulk of 2009 helping clients navigate the volatile market environment and managing the day-to-day business of their firms,” said David DeVoe, Schwab Advisor Services managing director of strategic business development. “Specific drivers of deal activity include advisors’ growing interest and sophistication in M&A and succession planning, continued interest of holding companies and private equity firms in RIAs, as well as advisor principal demographics.”