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January 31, 2013updated 04 Apr 2017 3:29pm

RIA M&A registers 30% rise in 2012: Schwab study

A study by Schwab Advisor Services has revealed that merger & acquisition (M&A) activity for year end 2012 has increased by 30% among the independent registered investment advisor (RIA) in the year 2012.

By Verdict Staff

The assets under management (AUM) of the 45 deals completed in 2012 was found to be US$58.8 billion, compared to US$43.9 billion for the 57 deals in 2011.

Jon Beatty, senior vice president for sales and relationship management at Schwab Advisor Services, said: "The independent model has become a destination of choice for both advisors and high-net-worth investors alike, and the growth in the overall size of the deals we saw in 2012 is proof that this is a model that is growing and flourishing."

"It also points to a new inflection point for the industry, as RIAs appear to be actively considering M&A as a way to grow their business, and as a component of their succession planning efforts," he added.

The dominant buyer category was found to be National Acquiring Firms, and the proportion of acquisitions by RIAs dropped in 2012, down from 44% of the total deals closed in 2011 to 20% of those completed in 2012.

Beatty further said: "National acquiring firms are proving to be a good overall alternative for the growth of the industry, attractive to both advisors that are looking to join the move to independence or RIAs that are seeking to expand their footprint or execute a succession strategy."

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