A record 101 merger and acquisition transactions involving registered investment advisory firms took place during the first half of 2021, setting the stage for another record year of RIA M&A activity, according to a report by DeVoe & Co.
Last year, a record 159 transactions took place, the report said.
Consolidators continued to be the dominant acquirer category, accounting for 41% of announced transactions year to date. Five dominated the category: Mercer Advisors, Beacon Pointe Advisors, Captrust, Focus Financial Partners and Wealth Enhancement Group.
Even though the period from April through June was the fourth-strongest quarter on record, a softening occurred, with transaction volume off 26% from the first quarter of 2021, DeVoe said.
DeVoe said the year’s second half is likely to be active, driven by fear of pending tax changes, high valuations that are attracting formerly reluctant sellers to the negotiating table, seasoned acquirers attracting more sellers with strong value propositions, and many realizing that an internal sale is not an option.
Results of a survey that DeVoe said it would soon release show that nearly half of RIA firms reported they had not successfully implemented a succession plan and that 61% of respondents felt their firms were not capable of a smooth transition of leadership to the next generation.
[More: 10 largest RIA deals in the first half of 2021]
Futures indicate stocks will build on Tuesday's rally.
Cost of living still tops concerns about negative impacts on personal finances
Financial advisors remain vital allies even as DIY investing grows
A trade deal would mean significant cut in tariffs but 'it wont be zero'.
Inflation, economic risk is greater than previously thought.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
