RIA M&A Activity Will Persist Post-Covid-19: Report
The coronavirus pandemic will certainly change the RIA M&A landscape, but recent growth in valuations and projections for how the industry will change suggest potential sellers will have more choice, according to a recent report.
Sixty-six percent of all RIA M&A deals in 2019 involved just 16 “acquisition brands,” compared to 13 in 2018 and 11 in 2017, Advisor Growth Strategies found. Meanwhile, $1.6 trillion in assets under management — and more than $20 billion in total valuation — is projected to “go into motion” in the next five to 10 years, according to AGS’ analysis of 2019 deals and a survey of RIAs conducted in early 2020 about valuation, business management and engaging in M&A. As more RIA owners look to exit, the industry will need more acquirers, AGS says.
Valuations Leap in RIA Deals, Reveals New Advisor Growth Strategies Study
The pandemic has impacted RIA M&A transactions, but increased competition and the need for succession planning that drove a blockbuster 2019 for deals have not gone anywhere, according to The 2020 RIA Deal Room study. Advisor Growth Strategies, one of the industry’s most trusted resources, researched 31 transactions that took place in 2019, surveyed 96 advisory firms and applied their own insights as leaders in RIA business management. With the support of their sponsor, BlackRock, Advisor Growth Strategies releases the most in-depth, quantitative study publicly available of why and how RIA industry deals succeed.
WSJ Wealth Adviser Briefing: Gun Stocks, Safer Investments, Sleep Changes
John Furey, managing partner and founder of Advisor Growth Strategies, wrote in Barron's that it stands to reason that a global crisis like the Covid-19 pandemic, and its economic
aftershocks, would slam the brakes on mergers and acquisitions in the RIA space. Time will not wait for firms in need of succession plans. They need resources and commitment to court the next generation of advisors and clients, and those resources must come from growth. We don’t know how long the pandemic will impact the industry’s appetite for M&A, but the good news is that RIAs can still do plenty of things, right now, to secure advantageous footing when we come through the crisis.
The Case for a Permanent RIA Road Show
It stands to reason that a global crisis like the Covid-19 pandemic, and its economic aftershocks, would slam the brakes on mergers and acquisitions in the RIA space. A recent Fidelity report highlights a stark reversal in deal flow: six RIA deals in March and April, compared to 20 in January and February, representing a 38% year-to-date decline against the same period in 2019. While buyers and sellers might turn to playing it safe during this volatile period, the fundamental needs that drive industry M&A have not gone away.
Navigating Client 'Concentration Risk' in a Sale
According to a November 2019 Cerulli Associates report, in the next five to 10 years, RIA firms with about $2.5 trillion in assets under management could be acquired.
Cerulli breaks down that number with $1.6 trillion based on retiring RIAs, $469 billion attributed to breakaway advisors, and $348 for growth-challenged firms.
Coronavirus crisis puts advisor succession planning in focus
The wealth management industry is scrambling as the coronavirus pandemic accelerates a retirement crisis — and no, it’s not about the clients.
With questions of health, longevity, and business continuity gaining more prominence than ever, firms in the U.S. are giving some much-needed reflection to when and how many advisors are leaving the workforce, and who will be there to replace them, reported Business Insider.