On Pace for Record M&A in 2017, RIAs Hit the Pause Button in Q4: TD Ameritrade FA Insight Report
February 01 2018 - 7:15AM
Business Wire
Advisory firm M&A expected to heat back up
in 2018, driven by succession and bullish markets
Advisory firms were on pace last year to set new records in
merger and acquisition activity until they hit the pause button in
the fourth quarter, as lawmakers’ efforts to overhaul the tax code
led to a surge of client meetings, according to the latest FA
Insight M&A Activity Update on advisory firm M&A trends. FA
Insight industry benchmarking research is a service provided by TD
Ameritrade Institutional.1
M&A activity was strong in the first three quarters of 2017,
with the number of deals on pace to beat 2016 results, but a halt
late in the year resulted in the number of deals targeting
independent advisory firms falling by 10, or 13 percent, to 70
deals last year versus 2016.
Numerous forces may have contributed to the slowdown, but many
advisors told FA Insight they fielded a surge in client calls and
meetings concerning the impact of a sweeping tax bill. At the same
time, some acquirers that have engaged in multiple deals paused to
secure new capital.
While 2017 marked the second straight year of falling deal
numbers, it was still the third-highest year on record. The total
volume of assets acquired, moreover, rose by 32 percent to $114
billion in 2017 compared with 2016, also the third highest on
record. Average deal-size increased by 35 percent to $434 million
from 2016.
Advisory firm M&A activity has been robust in recent years,
fueled by growing demand for succession solutions among aging
principals, healthy firm profits and rising financial markets. The
latest numbers suggest buyers are targeting larger firms, said FA
Insight, which has been tracking industry M&A activity since
2000. A growing number of RIA acquirers are choosing to “move
upstream” and pursue bigger targets or have turned to M&A as
their primary growth strategy.
“Advisors took care of their clients during a time of
uncertainty, but we expect M&A activity to resume its recent,
heightened pace in 2018,” said Vanessa Oligino, who as director of
Business Performance Solutions at TD Ameritrade Institutional
oversees FA Insight. “Indeed, we’ve already seen 12 transactions
announced just in the first three weeks of January.”
The findings of the latest FA Insight M&A Activity Update
were first announced at TD Ameritrade Institutional’s annual
advisor conference, 2018 National LINC, in Orlando, Fla.
FA Insight gathers transaction data from news outlets, press
releases and other secondary research sources. Its M&A database
includes publicly announced transactions involving the acquisition
or merger of an independent advisory firm serving households or
individual clients, and which manages at least $50 million in
assets or generates at least $500,000 in annual revenue. Internal
transitions of ownership and the movement of advisor teams are not
included.
To see or download a copy of the report, click here.
FA Insight is a product of TD Ameritrade Institutional, division
of TD Ameritrade Inc. FA Insight is a trademark owned by TD
Ameritrade IP Company, Inc.
About TD Ameritrade InstitutionalTD Ameritrade
Institutional is a leading provider of comprehensive brokerage and
custody services to more than 6,000 fee-based, independent RIAs and
their clients. Our advanced technology platform, coupled with
personal support from our dedicated service teams, allows
investment advisors to run their practices more efficiently and
effectively while optimizing time with clients. TD Ameritrade
Institutional is a division of TD Ameritrade, Inc., a brokerage
subsidiary of TD Ameritrade Holding Corporation.
About TD Ameritrade Holding CorporationTD Ameritrade
provides investing services and education to more than 11 million
client accounts totaling more than $1 trillion in assets, and
custodial services to more than 6,000 registered investment
advisors. We are a leader in U.S. retail trading, executing more
than 700,000 trades per day for our clients, nearly a quarter of
which come from mobile devices. We have a proud history of
innovation, dating back to our start in 1975, and today our team of
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client care to transform lives, and investing, for the better.
Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or
read our stories at Fresh Accounts.
Brokerage services provided by TD Ameritrade, Inc., member FINRA
/ SIPC
1. TD Ameritrade Institutional is a division of TD Ameritrade,
Inc., a brokerage subsidiary of TD Ameritrade Holding
Corporation
Source: TD Ameritrade Holding Corporation
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version on businesswire.com: http://www.businesswire.com/news/home/20180201005099/en/
TD AmeritradeJoseph A. GiannoneCommunications + Public AffairsO:
201-369-8705M: 201-467-1946E: joseph.giannone@tdameritrade.com
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