RIA mergers and acquisitions notched a sixth consecutive annual record in 2019, and the streak probably isn’t over.

RIAs conducted 132 mergers and acquisitions during 2019, according to the fourth-quarter Nuveen/DeVoe & Company RIA Deal Book. That’s a 31% increase from 2018, when 101 deals took place.

Despite five previous years of record transactions, DeVoe notes that 2019 was an especially active year, as dealmaking has historically increased by an annual rate of 10% to 15%.

DeVoe believes the number of transactions is likely to increase through most of the 2020s as higher valuations compel more advisors to sell, as the accessibility of capital continues to aid buyers, as more experts like investment bankers engage with buyers and sellers, as deal structures improve and as more mega-firms come to the bargaining table.

Though there was a large jump in transactions, DeVoe measured a decline in total AUM transacted—$347 billion in transactions were reported in 2019, down from $494 billion in 2018 and $409 billion in 2017. Much of this decline came from the top—the combined AUM involved in the Deal Book’s top 10 transactions in 2019 measured $233 billion, 41% less than the $391 billion involved in 2018’s top 10.

The Deal Book says to take this decline with a grain of salt—much of 2018’s total was due to the $170 billion merger between Edelman Financial Services and Financial Engines.

The largest transaction in 2019 recorded by DeVoe was Charles Schwab’s acquisition of USAA Investment Management and its $90 billion in assets under management. That was followed by Goldman Sachs’ acquisition of United Capital and its $25 billion in assets under management and Schwab’s deal for TD Ameritrade involving more than $21 billion in AUM.

The year’s top acquirers by transactions were Focus Financial Partners, which conducted 19 acquisitions in 2019, followed by Mercer Advisors with nine, CAPTRUST with seven and Wealth Partners Capital Group with six.

The most active buyers of RIAs in 2019 were other RIAs, who accounted for 60 transactions or 45% of the total, up from 41 transactions and 35% of the total in 2018. RIA consolidators were the next most active dealmakers, accounting for 49 transactions and 37% of the total in 2019, a decline from 42 transactions and 42% of the total in 2018.

Banks, on the other hand, accounted for just three transactions in 2019, 2% of the total, down from eight transactions and 8% of the total in 2018. The Deal Book’s authors are not sure if the decline is an anomaly or indicative of a trend of declining bank/RIA transaction activity.

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