Mergers and acquisition activity involving RIAs during the first quarter was on pace for a record-setting year, according to Charles Schwab.

There were 17 deals done and nearly $24 billion in total assets under management acquired during the quarter by RIAs. That performance was on pace to eclipse the record 70 deals that closed in 2010 and the record $90.7 billion in AUM acquired in 2007. Schwab began tracking RIA M&A activity in 2004.

"We're cautiously optimistic," says Jon Beatty, senior vice president of client development at Schwab Advisor Services, the parent company's division that serves the independent RIA space. "The year is off to a strong start and it marked a significant rebound from the weak fourth quarter last year, but one quarter doesn't make a trend."

The statistics tracked by Schwab are industrywide numbers not exclusive to Schwab's work with RIAs. Beatty says the uptick in M&A activity reflects the health and strength of the RIA industry right now.

Among the buyer types tracked by Schwab, the category of so-called national acquiring firms--a group that includes the likes of HighTower Advisors, Focus Financial Partners and United Capital Financial Advisers--was the most active. Beatty notes that nine of the 17 deals last quarter involved advisor offices leaving wirehouse firms to join independent firms.

"I think that's part of the story behind the success of the national acquiring firms," Beatty says. "These are built to attract advisors from the wirehouses."

Deals between RIA firms was the second most prevalent type of transaction category during the first quarter, while the number of RIA acquisitions done by banks--both regional and national--fell off after last year's rally among those sectors.

The average deal size during the first quarter was about $1.4 million, or roughly double the average deal size during full-year 2011. Driving that growth was AMG Wealth Partners' acquisition of a majority equity interest in Veritable, LP, a Newtown Square, Pa.-based wealth management firm with more than $10 billion in assets. AMG, based in West Palm Beach, Fla., is a subsidiary of Boston-based Affiliated Managers Group Inc.

In addition, Beatty says, there were three other deals involving RIA firms with more than $1 billion in assets.

Beatty believes the pace of M&A activity going forward will depend on market conditions. "As long as we have a steady to improving marketplace, I think acquisitions will happen," he says, adding that a souring economy or market downturn could mean headwinds for M&A deals.

First « 1 2 » Next