ECHELON Partners Releases Q2 2018 RIA M&A Deal Report Revealing Record-High Deal Activity
MANHATTAN BEACH, Calif. (PRWEB) July 18, 2018 -- ECHELON Partners, a leading investment bank focused exclusively on the wealth and investment management industries, announced today the release of the 2nd 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: As predicted in the Q1 2018 edition of the ECHELON RIA M&A Deal Report, record-high deal volume was sustained in Q2. A highest-ever 48 RIA M&A transactions were consummated in Q2, supporting ECHELON’s forecast of 189 total deals for the full year of 2018.
These second quarter transactions involving RIAs were a considerable 14% higher than the 2017 quarterly average of 42 deals, resulting in the highest quarter of RIA M&A transactions ever recorded. This marks just the second time in the past five years that we have witnessed Q2 RIA M&A activity exceed Q1 activity.
Breakaway activity maintained its swift pace in Q2 2018, with 123 departures, as fears of an impending end to the broker protocol pact have subsided. Robust breakaway activity in Q2 2018 marks a 78% increase over Q2 2017’s 72 breakaways.
ECHELON believes that the precipitous spike in breakaway activity will persist over the coming months as advisors actively seek independence. The perceived legal risk for departing one’s firm with clients in tow has largely waned. Meanwhile, a retrospective of successful Q1 breakaways producing limited legal backlash, has strengthened advisor confidence. The second quarter’s impressive 123 breakaways was 18% above the historic average of 104 quarterly breakaways over the past twenty-one quarters.
“We are looking back on the most active RIA M&A quarter ever, exemplifying the current strength of the RIA marketplace,” said Mike Wunderli, a Managing Director at ECHELON Partners. “Economic conditions have also allowed breakaways to remain at near-record levels, as advisors seem to have gained confidence from witnessing so many successful breakaways in Q1.”
Additional and expanded findings from the Deal Report include:
• Semi-Annual Deal Volume Surges by 24%: Another record-setting second quarter of deals was realized in Q2 2018 with 48 transactions consummated. The deal volume witnessed in the first half of 2018 poises the industry for a sixth straight record setting year of M&A activity.
• Average Deal Size On Pace to Exceed $1 BN for the Third Straight Year: The second quarter of 2018 achieved an average transaction size of over $1.3 BN, an increase of 34% over 2017’s $1.0 BN 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 46% of RIA purchases in Q2 2018, consummating 22 deals.
• RIA Breakaways Rally as Broker Protocol Fears Subside: Q2 2018 saw activity decrease 4% relative to Q1 2018, with 123 breakaways. With that said, breakaway activity remained heightened as recent fears of increased litigation risk have proven to be overstated.
• $1 BN+ AUM Deal Making Continues to Surge: $1 BN+ AUM wealth manager M&A is projected 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 ideal, lower-risk platforms.
“Large consolidators continue to drive RIA M&A activity as they leverage their proven track records and abundant resources,” said Carolyn Armitage, a Managing Director at ECHELON Partners. “However, it is worth noting that there has been a resurgence amongst bank buyers. Additionally, as senior advisors look to retire and transition their businesses, they are looking for experienced successors that can sustain the growth and culture of their firm. Given the market environment, and age of the current business cycle, we expect the M&A and breakaway activity to continue, if not accelerate, in the second half of 2018.”
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.
Carolyn Armitage, ECHELON Partners, http://www.echelon-partners.com/, +1 3109488912, [email protected]
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