Mergers and acquisitions among registered investment advisors and independent broker/dealers were significantly up from last November, according to Fidelity’s November Wealth Management M&A Transaction Report.
RIA assets under management totaled $20 billion, a $3 billion increase from 2018 when Fidelity calculated $17 billion. This stems from there being two additional acquisitions over the previous year, in which there were 10 M&As. It was a different outcome when we look at independent broker/dealers. Two IBD transactions occurred equaling $194.1 billion in assets under administration, according to the report. Though there wasn’t a significant increase for November, Fidelity found a different story for year to date. The report shows there have been 11 IBD transactions totaling $628.7 billion AUA, a 39% jump from $453 billion for eight transactions around the same time last year.
The largest transaction in November was The Advisor Group’s acquisition of Ladenburg Thalmann, which brought the independent broker/dealer’s AUA to $181.1 billion. Other transactions over $1 billion were seen with another IBD: Atria Wealth Solutions bought Western International Securities for $13 billion.
In the RIA space, there were three transactions that were more than a billion dollars. Private equity firm Lovell Minnick Partners took a majority stake in Pathstone for $15 billion. Sandy Spring Bancorp bought Rembert Pendleton Jackson for $1.3 billion. Last, Kestra Financial’s acquisition arm, Bluespring Wealth Partners, purchased Vector Wealth Management for $1.1 billion.
Overall, Fidelity recorded 12 transactions last month. November started with the sale of registered investment firms, including Laffer Investments to Butcher Joseph Asset Management; Landmark Financial Advisors to Commonwealth Bank and Trust Company; and Surevest Wealth Management to Canadian firm CI Financial.
Four other sale announcements finished out the month. Word went out that Mercer Advisors bought AL Hewitt. Two large RIA acquirers got in on the M&A action: Creative Planning purchased Optifour Integrated Wealth Management and Homrich Berg snatched up Cedar Rowe Partners. Dynasty Financial Partners partnered with a former Northwestern Mutual firm to form the independent RIA High Note Wealth.
Year to date, Fidelity counted 127 mergers and acquisitions; 116 of them were RIAs. The large financial services firm blames the continuous buying frenzy on “the pressure for firms to scale and pervasiveness of prepared buyers who hold significant capital in a low-interest-rate environment.”