Deal Data

Q2 2019 Executive Overview

Wealth management M&A activity reached a new quarterly high in Q2 of 2019, with 52 transactions recorded by ECHELON’s M&A Deal Tracker. If the market keeps up its current pace there could be over 200 transactions by year-end, a record volume for the wealth management industry. Dealmakers continued their heightened activity despite volatility in capital markets during the quarter. The ongoing trade war between the U.S. and China caused investor angst in May and volatility returned to levels not seen since the end of 2018 with the VIX Index spiking over 60% during the month. However, investor optimism returned, and markets saw their best June since 1955, as measured by the 6.9% return for the S&P 500. The wealth management M&A market has remained buoyant despite a volatile past 12 months in capital markets as structural forces continue to drive consolidation.

The appetite of well-capitalized buyers (both strategic and financial) once again dominated the RIA M&A Leaderboard in terms of AUM transacted. The quarter saw a significant divestiture by Wells Fargo, who sold their $827 BN AUM Retirement & Trust planning business to Principal Financial Group for a reported $1.2 BN. Retirement planning services have lower relative margins compared to other wealth management verticals and the deal signals that Wells Fargo will focus their resources elsewhere. Another blockbuster deal saw United Capital sell their $25 BN AUM to Goldman Sachs. United Capital commanded a higher multiple than generally seen in wealth management transactions (reported to be 16-18x Pro Forma EBITDA) given their proprietary technology platform, which was valued more akin to a software company. The implications of this deal, with a wirehouse purchasing a large RIA, are yet to be felt in the market. The deal could spark more activity from large strategics, who may use M&A to diversify their client base, bolster AUM, and increase their service offerings. Despite mega-transactions during the quarter, mid-sized deals supported record-breaking volume.

Wealth Management Deals
Q2 RIA M&A Deal Volume Hits Record High, Supported by Mid-Sized Transactions

M&A activity in the RIA industry continues to grow at an accelerating rate and is projected to reach its seventh straight record-setting year in 2019.

Breakaway Activity
Breakaway Activity Increases Sharply in Q2 2019 after a Slow First Quarter

After an unusually slow start to the year, Q2 2019 saw 192 breakaways, the most of any quarter since ECHELON began recording the data. Two mega breakaways ($5 BN+) from First Republic were supported by activity across the AUM spectrum.

Percentage Breakdown of RIA Acquirers by Firm Type
RIAs More Acquisitive in 2019

After experiencing declining market share of M&A transactions since 2016 RIAs are dominating deal volume so far this year. 2019 has seen 36 RIA-to-RIA transactions and if the trend continues, this category will see a year-over-year increase of 132%.

Average AUM per M&A Deal
Average Deal Size Decreases

The second quarter saw the two of the largest wealth management M&A transactions (as measured by AUM transitioned) since ECHELON began tracking this data, but average deal size decreased, indicating that activity is being driven by smaller transactions.


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© ECHELON Partners 2019. All rights reserved. Securities offered through ECHELON Capital Partners, LLC, member of FINRA/SIPC. ECHELON Partners and ECHELON Capital Partners, LLC, are affiliated companies.

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