MANHATTAN BEACH, Calif., Oct. 17, 2018 /PRNewswire-PRWeb/ -- ECHELON Partners, the leading investment bank focused exclusively on the wealth and investment management industries, announced today the release of the 3rd Quarter, 2018 ECHELON RIA M&A Deal Report designed to capture the key transactions, trends and M&A activity in the US Wealth and Investment Management industries.
Record-Breaking RIA M&A Deal Making: 3rd Quarter deal volume remained on pace to make 2018 a record-setting year for Wealth Management deals. 43 RIA M&A transactions were completed in Q3, suggesting that 183 total deals will be consummated in the full year of 2018.
Transactions involving RIAs in the third quarter were a substantial 30% higher than the third quarter average since 2013, resulting in the highest third quarter of RIA M&A transactions ever recorded.
Breakaway activity spiked in Q3 2018, with 139 departures, marking the second highest total since 2013, and a 13% increase over last quarter's 123 breakaways.
ECHELON believes that the increase in breakaway activity will persist over the coming months as advisors actively seek independence and liquidity amidst an aging business cycle. The increased occurrence of large, successful $1BN+ breakaways has reinforced advisor confidence. The third quarter's impressive 139 breakaways was 30% above the historic average of 107 quarterly breakaways over the past twenty quarters.
Additional and expanded findings from the Deal Report include:
- Third Quarter Deal Count Reaches Highest Since 2013: The 43 deals witnessed in Q3 2018 were the highest third quarter count since ECHELON began tracking this data, further signaling the strength of the RIA M&A deal marketplace.
- Average Deal Size on Pace to Exceed $1.5 BN for the First Time: The third quarter of 2018 brought annual average transaction size of over $1.5 BN, a 55% increase over 2017's average deal size.
- Consolidators Maintain Control of RIA Deal Activity: In search of growth platforms and scale, well-capitalized, strategic buyers, and consolidators accounted for 53% of RIA purchases in Q3 2018, consummating 23 deals.
- RIA Breakaways Increase as Large Breakaways Encourage Advisors: Q3 2018 saw activity increase 13% relative to Q2 2018, with 139 breakaways. Successful breakaways exceeding $1BN AUM in 2018 have spurned advisor confidence in their own plans to transition to new firms.
- $1 BN+ AUM Deal Making Remains Steady: Projected $1 BN+ AUM wealth manager M&A remains on pace to surpass the 5-year average of 20 transactions by approximately 30% in 2018E - with 26 wealth manager M&A transactions - as buyers seek out these attractive lower-risk platforms.
"Although we witnessed a decrease in deal volume quarter-over-quarter there continues to be upward pressure on average AUM per deal as the RIA buyer pool expands to include more aggressive platforms such as private equity firms and consolidators," said Carolyn Armitage, a Managing Director at ECHELON Partners. "We have not seen this level of interest from strategic and financial buyers in our 15-year history and forecast deal volume and size to be at record annual levels come year-end fueled by this trend."
To gain access to the ECHELON RIA M&A Deal Report, visit: http://www.RIADealReport.com
About ECHELON Partners
Founded over 15 years ago, ECHELON Partners http://www.echelon-partners.com combines the high quality expected of a large investment bank with the high-touch expected of a personal boutique. Compared to traditional investment bankers, ECHELON Partners offers a total platform approach of investment banking, valuation and management consulting services - bringing together financial advisory, strategic consulting, and senior-level operational experience to each engagement. ECHELON's keys to successfully serving clients are a deep understanding of the wealth and investment management industry, an extensive network of contacts and strategic partners, a powerful set of processes and databases, integrity, and trust. ECHELON Partners is committed to bringing all of these qualities to every client assignment. With a track record spanning hundreds of engagements, ECHELON's team understands the unique needs of owners and executives in the financial services industry.
SOURCE ECHELON Partners
Share this article