The 138 transactions last year set a new record for RIA M&A activity, and a 16% compound annual growth rate since 2009. Macro trends including an aging adviser community, growing technology challenges, and increased regulator oversight (DOL rule) are setting up for a perfect storm of continuing M&A activity.
Last year marked the third time in the past five years that the average deal size exceeded $1 billion in assets under management. RIAs were the acquirer in 42% of the transactions, which is down from 47% in 2013. The trend is reflective of the growing impact of strategic acquirers and consolidators, Mr. Seivert said. Even though the numbers are growing at a record clip, it still represents a fraction of the potential, according to Michael Kitces, partner at Pinnacle Advisory Group.