The number of registered investment advisory firms merging last year was a record breaker, according to a new report from Schwab Advisor Services.
The report released by Schwab today showed there were 109 M&A deals involving RIAs in 2010. That number was the highest since Schwab began tracking deal activity in 2003 and a 56% increase from the 70 total deals tracked in 2009.
The 109 total transactions in 2010 represent approximately $156 billion in total assets under management, compared withapproximately $103 billion in assets under management in 2009. The average transaction size in 2010 was approximately $1.4 billion compared with 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.
Of the 109 deals tracked by Schwab in 2010, 58% of deals represented less than $500 million in assets under management, 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 advisors 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.