The first half of the year saw record M&A activity in the registered investment advisor space, according to DeVoe & Co.’s second quarter “RIA Deal Book”—and for the first time, more than 100 deals were reported in the first half of the year.

There were 101 transactions in the first half, which is a higher figure than the 67 deals logged in the first half of 2020—which was itself a record year for deals.

“The period is 51% above 2020, which corresponded with the initial stages of the Covid crisis,” said the DeVoe report. “Many existing drivers yield confidence that 2021 will eclipse 2020’s all-time high of 159 transactions.”

Consolidators such as Mercer Advisors, CAPTRUST, Beacon Pointe and Focus Financial were the dominant acquirers in the first half of the year, launching 41% of all new transactions, the report said. They were followed closely by RIA firms acquiring their peers. DeVoe pointed to Congress Wealth Management’s purchase of the $2.4 billion Pinnacle Advisory Group and Sequoia Financial Group’s merger with Wealthstone Advisors (forging a $7 billion AUM firm). Meanwhile, Edelman Financial Engines picked up Viridian Financial Advisors, a firm with $826 million in assets.

“In terms of the buy side, we’ve seen some major players who have sort of dominated the landscape in getting more transactions done than others—Mercer, for instance,” said DeVoe & Co. founder David DeVoe. “It was interesting to see banks come back to the market. They’ve been on the sidelines to a degree the last couple of years.”

Banks contributed only 4% of the transactions in the year, the report said, but the four acquisitions they did this year have already surpassed the bank activity of the past few years.

Despite a good first half, second quarter activity did soften a little, down 26% from the first quarter. That’s likely because of the blockbuster activity that the industry saw in January, says DeVoe, but trends still suggest there’s going to be an acceleration.

For one thing, there are huge private equity players in the marketplace, and they are willing to pay for target firms at nosebleed valuations (in the double-digit multiples at 10 or more times cash flow). This is happening as aging firm owners are thinking about their succession plans (or lack thereof) in the wake of Covid. The pandemic was a wake-up call for many of them, who realized they weren’t going to be able to sell their firms to their own staffs, especially if higher valuations make that idea impossible. Furthermore, the specter of future capital gains tax increases might make now the better time to sell if owners want to avoid the tax bite for selling their firms.

Now seems to be the time to strike while the iron is hot.

DeVoe says midsize firms, which have put the pandemic behind them and gained confidence watching the giant megafirms succeed, also became more active in M&A deals. Firms with $501 million to $1 billion more than doubled their transactions in the first half of 2021 from the same period last year, logging 25 deals where there were only 11 last year.

“Despite the fluctuating allocation of transactions by size, the overall average AUM of selling firms through the first half of 2021, at slightly over $1 billion, was nearly identical to the average for all deals in 2020,” the report said.