Fidelity Institutional Wealth Services has launched a platform aiming to make mergers and acquisitions easier for registered investments advisors.
Through its partnership with Live Oak Bank, the new program will provide counseling and instruction, matchmaking services for RIAs interested in potential M&A opportunities, and discounted financing.
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Fidelity’s executive vice president and head of practice management and consulting, David Canter, said: "There are really three elements. Its insights and education, number one. Its connections with firms that are looking to buy, sell, or merge. And the ingredient that’s really been lacking to date is a bank that’s willing to provide access to financing."
According to the Fidelity RIA benchmarking study conducted in 2011, roughly 63% of RIAs would consider acquiring another firm, 38% would consider merging, and 16% would consider selling in the next three years.
Though there were 13 RIA M&A deals in the first quarter of 2013, according to a Schwab Advisor Services report, the best showing in three quarters, there were only 45 M&A deals in 2012, down from 57 in 2011.
There is a gradual decrease in the number of M&A deals every year accounting for only 13 RIA M&A deals in the first quarter of 2013, whereas 45 M&A deals in 2012, down from 57 in 2011, reported Schwab Advisor Services.
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By GlobalData"While many RIAs are interested in M&A, the pace of deals has not been commensurate with the interest we’ve seen from advisors. We believe that is largely due to the lack of organisational focus, tools, and third-party support needed to facilitate M&A," Canter added.
In order to understand the procedure, fidelity has issued a series of white papers as well as a guide, workbook, and checklist to lead their clients step by step through the M&A process.
Fidelity will host client events featuring M&A-focused networking opportunities and informational workshops to help link up potential M&A matches.
It also uses its relationship with the independent industry networking website RIA Match, to help clients make connections and contract for the site’s services at a discounted rate.
With its partnership, Wilmington based Live Oak Bank will offer loans of up to US$5 million to qualified RIAs, loans at discounted pricing and an abbreviated loan acceptance process as well as provides loans to finance breakaways and internal succession plans.
