Schwab Advisor Services Releases Industry-Wide RIA Merger and Acquisition Activity for Year-End 2013

RIAs move ahead of Strategic Acquiring Firms as the leading buyer category for the year

SAN FRANCISCO--()--There were 54 completed merger and acquisition (M&A) transactions in the registered investment advisor (RIA) space in 2013, according to industry-wide data released today by Schwab Advisor Services. The deals totaled approximately $43.6 billion in assets under management (AUM). RIAs emerged as the leading buyer category in 2013, representing 44 percent of overall deal activity for the full year. Strategic Acquiring Firms, the leading buyer category in 2012, represented 32 percent of transactions in 2013 vs. 53 percent in 2012. Across all deal types, there was a 20 percent increase in activity in 2013 compared to 2012, although overall acquired AUM decreased by 26 percent vs. 2012. The second half of 2013 closed with 36 completed deals totaling $28.2 billion in AUM, which doubled the pace of 18 deals completed in the first half of 2013.

"We saw a healthy, consistent amount of M&A activity in the RIA sector last year as the independent model continued to be a destination of choice for advisors and more firms looked to fast track their growth,” said Jonathan Beatty, senior vice president, sales and relationship management, Schwab Advisor Services. “There was an identifiable trend last year during the second half of 2013 in which larger firms acquired smaller and mid-size firms, an indication that firms across the spectrum looked to M&A as a means to quickly expand their footprint.”

According to Schwab’s M&A data, the second half of 2013 showed smaller RIAs employing M&A as a growth strategy. The trend reflects findings also seen in Schwab’s 2013 RIA Benchmarking Study1, in which 25 percent of firms with between $100 million and $250 million in AUM reported to be actively looking to acquire another firm.

Schwab Advisor Services provides M&A industry data as part of a continued commitment to advancing the interests of RIAs, including a consultative approach that helps firms find others that meet their strategic growth plans while also being a good cultural fit.

About Schwab Advisor Transition Services™

Schwab Advisor Transition Services helps advisors think through growing and exiting a business at the right time, with the right people and at the right value. This includes goal setting, evaluating options (internal succession, external sale, and merger or acquisition) and executing a transition plan.

Schwab’s Transition Services includes Schwab’s M&A Listing Service, an online database offered to independent registered investment advisors that custody with Schwab Advisor Services. The service connects advisor firm buyers and sellers and enables advisors to maintain anonymity while soliciting interest and collecting information from other advisor firms on acquisition, mergers, or sales. Buyers also can search for investment professionals with books of business who would like to join an RIA firm.

Additional information and new transitions content are available at www.SchwabTransition.com.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube, LinkedIn and our Schwab Talk blog.

Disclosures

Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.

Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

Investing involves risk, including possible loss of principal.

All data compiled and analyzed by Schwab Advisor Services. Data reflects firms being sold with assets under management exceeding $50 million as of December 31, 2013.

1 About the RIA Benchmarking Study

Schwab designed this study to capture insights in the RIA industry, based on survey responses from individual firms. The 2013 study provides information on topics such as asset and revenue growth, sources of new clients, products and pricing, staffing, marketing, technology, and financial performance.

Since the inception of the study in 2006, more than 2,500 firms have participated, with many repeat participants. A total of 1,025 advisory firms representing nearly half a trillion dollars in AUM that custody their assets with Schwab participated this year, making this the leading study in the RIA industry.

The RIA Benchmarking Study comprises self-reported data from advisory firms that custody their assets with Schwab. Participant firms represent various sizes and business models. They are categorized into 12 peer groups—6 wealth manager groups and 6 money manager groups, by AUM size.

The study is part of Schwab's Business Consulting Services, a practice management offering for RIAs. Grounded in the best practices of leading independent advisory firms, Business Consulting Services provides insight, guidance, tools, and resources to help you strategically manage and grow your firm.

Schwab may limit what can be listed on the M&A Listing Service. Buyer listings and Career Opportunity listings are generally, but not always, limited to independent investment advisors that custody their clients' assets with Schwab Advisor Services. Schwab Advisor Services may further limit Buyer listings and Career Opportunity listings to those of its clients with whom it has favorable business prospects. Schwab Advisor Services has a financial interest in, and compensation received by Schwab Advisor Services personnel is affected by, the retention and growth of assets custodied at Schwab Advisor Services. This may incent Schwab Advisor Services to decline some proposed Buyer and Career Opportunity listings.

Independent investment advisors are not owned by, affiliated with or supervised by Schwab.

© 2014 Charles Schwab & Co., Inc. (Schwab) (Member SIPC) All rights reserved.

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Contacts

Charles Schwab
Rob Farmer, 415-667-0083
Rob.Farmer@schwab.com
or
The Neibart Group
Shree Dhond, 718-801-8301
sdhond@neibartgroup.com

Jonathan Beatty, senior vice president, sales and relationship management, Schwab Advisor Services (Photo: Business Wire)

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Release Summary

Schwab Advisor Services Releases Industry-Wide RIA Merger and Acquisition Activity for Year-End 2013.

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Contacts

Charles Schwab
Rob Farmer, 415-667-0083
Rob.Farmer@schwab.com
or
The Neibart Group
Shree Dhond, 718-801-8301
sdhond@neibartgroup.com