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Quarterly Industry-wide M&A Transactions October 1, 2011 - December 31, 2012. (SOURCE : Schwab Advisor Services, Strategic Business Development - December 31, 2012)

According to industry-wide independent registered investment advisor (RIA) mergers and acquisition data compiled by Schwab Advisor Services, 2012 closed with a thirty percent increase in the total value of M&A transactions year over year. The assets under management of the 45 deals completed in 2012 totaled $58.8 billion versus $43.9 billion for the 57 deals in 2011.

“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,” said Jon Beatty, senior vice president, sales and relationship management, Schwab Advisor Services. “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.”

National Acquiring Firms Continue to Lead M&A Deal Flow

National Acquiring Firms remained the dominant buyer category, finishing the year with 25 of the 45 total M&A deals. Meanwhile, the proportion of acquisitions by RIAs dropped in 2012, down from 44 percent of the total deals closed in 2011 to 20 percent of those completed in 2012.

“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,” said Beatty.

Activity among National Acquiring Firms remained high for the third consecutive quarter in 2012, representing 55 percent of the deals completed throughout the year.

Schwab Advisor Services’ quarterly RIA M&A report is provided as part of the firm’s continued commitment to advancing the interests of RIAs across the business lifecycle. This includes supporting advisors through each phase of the process of starting, running, growing and exiting a business.

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