RIA M&A Decade in Review (and 2020-2029 Preview)

RIA M&A

New report details trends in RIA mergers and acquisitions

The last 10 years saw steady growth in mergers and acquisitions of independent registered investment advisors (RIAs), and that deal volume growth is expected to continue into the next decade.

This according to Succession Resource Group, Inc. (SRG), which is publishing its 10-year retrospective look at the state of the mergers and acquisitions for independent RIAs and advisors, recapping deal data, trends, and predictions for the coming decade.

SRG is a Portland, Ore.-based succession consulting firm specialized in helping RIAs, independent broker-dealer affiliated advisors, CPAs, and insurance agents to value, buy/sell/merge, and develop exit strategies for their business.

SRG’s data for this period draws upon more than $250 million in third-party transactions and over $20 billion in total assets under management (AUM) transferred1.

From 2010 to 2019, the investment advisor industry experienced several major events that impacted the M&A market for RIAs:

According to David Grau Jr., President of SRG, deal volume in the last 10 years grew steadily and is expected to continue into the next decade, driven by: 1) low interest rates, pressure on fees; 2) the current bull market inflating AUM and therefore values of RIA practices; 3) the continued graying of the industry (the average advisor is 55 years old2); 4) the declining total number of advisors over the last decade (CAGR of -0.7%3); and 5) the industry’s complete lack of succession planning (73%4 of advisors lack a succession plan).

The coming decade

From 2020 to 2029, Grau predicts:

On Thursday, Feb. 20, 2020, SRG will be hosting a panel discussion with David DeVoe of DeVoe & Co. and Michael Kitces looking back at the last decade and making predictions for the coming decade of deals. For an exclusive look at 2019 M&A deal data, view the recording of SRG’s annual webinar here.

1 Deal data is comprised of independent Registered Investment Advisors and securities professionals with less than $1 billion in AUM from SRGs Internal Database
2 J.D. Power Press Release, July 9, 2019
3 The Cerulli Report U.S. Intermediary Distribution 2019
4 FPA and Janus Henderson Investors, “The Succession Challenge 2018”

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