The first half of 2013 closed with 18 completed transactions, totalling US$15.4 billion in assets under management (AUM), which is the lowest on record since the first half of 2008, according to industry-wide registered investment advisor (RIA) merger and acquisition (M&A) data compiled by Schwab Advisor Services.
In comparison, the first half of 2011 ended with 27 deals totalling US$20 billion in AUM, while 25 deals totalling US$36 billion in AUM were completed during the same time period in 2012.
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According to the report, deal flow in the second quarter of 2013 slowed with only five completed deals, but there was an increase in the average deal size from US$447 million in the first quarter to US$1.9 billion in the second quarter of 2013.
According to Jonathan Beatty, senior vice president for sales and relationship management at Schwab Advisor Services, said: "Fewer mergers and acquisitions are a likely outcome of the rapid rate of organic growth that advisors are currently experiencing.
"Advisors considering ownership transition may be focusing on creating more value in their firm leading them to delay a deal for a few years. However, M&A continues to be an important option for those looking to quickly gain scale, access new markets, or enhance their capabilities."
According to the 2013 RIA Benchmarking Study from Charles Schwab, among firms managing US$100 million to US$1 billion in AUM approximately 25% are actively looking to acquire another firm.
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