Deal Data

2019 Executive Overview

2019 was the seventh straight record-setting year in terms of number of deals completed, with 203 transactions recorded in ECHELON’s M&A Deal Tracker. This represents a 12.2% increase over 2018 and a 15.4% annual growth rate over the past five years. Activity was especially high in the second and fourth quarters. The year’s record total demonstrates that, despite heightened valuations and market volatility, structural forces in the market continue to drive deals to the finish line. Firms increasingly view the benefits of consolidation versus a path of independence. Larger firms benefit from cost savings, have improved resources to invest in the latest technology, and have an easier time recruiting talent.  While deal volume was dominated by strategic buyers such as Focus Financial and Mercer Advisors, the largest deals were carried out by private equity investors and large financial institutions as measured by AUM transacted.  

Deal and capital raising trends present the following key developments: a race to build the most complete WealthTECH product suite by the best-capitalized strategics; an increase in partnership and white-label rollouts versus a buy and/or build strategy; and a continuance in the advisor community’s desire to improve client experience via technology. Deals and partnerships between traditional wealth management platforms (and other financial institutions) and pure play WealthTECH businesses continued to drive increased technological adoption rates across the industry, improving the end-consumers experience. There is also healthy capital raising activity for startups, who are generating interest from a variety of investors, including venture capital, growth equity funds, and strategic investors. The most prominent deals of the year involved strategic investors including BlackRock, Broadridge Financial Solutions, Invesco, and Envestnet, who boosted their WealthTECH service offerings via M&A.

Wealth Management Deals
M&A Activity Reaches Record High for the Seventh Straight Year

In 2019, M&A activity in the wealth management industry reached a new record high – the seventh straight record-setting year. The year’s 203 transactions, or roughly 17 per month, represent a 12.2% increase over last year’s record level and a 15.5% compound annual growth rate (CAGR) since the business cycle trough in 2009.

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

An increasing number of teams are choosing to shift to the RIA model each year. 2019 saw 121 teams leave for RIAs, accounting for just over 18% of all breakaways.

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

Strategics & consolidators lost ground in 2019 but remained the most active dealmaking category.  The "Other" category experienced a record year, fueled by private equity firms that were attracted to the industry’s larger platforms with recurring revenue, high margins, and leverageable EBITDA.

Average AUM per M&A Deal
Average Deal Size Decreases

Average AUM per M&A transaction increasing 16% over 2018 and reaching new record levels. This represents the fourth year in a row that average deal size has exceeded $1 BN in AUM.


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© ECHELON Partners 2020. 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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