Schwab Advisor Services Reports 2010 Independent RIA Mergers and Acquisitions Activity

2010 A Record Year for RIA Industry M&A Activity with 109 Deals According to Schwab Data

Wednesday, February 2, 2011 8:30 am PST

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Specific drivers of deal activity include advisors’ growing interest and sophistication in M&A and succession planning, continued interest of holding companies and private equity firms in RIAs, as well as advisor principal demographics."

SAN FRANCISCO--(BUSINESS WIRE)--Schwab Advisor Services, a leading provider of custodial, operational and trading support for more than 6,000 independent registered investment advisory firms (RIAs), today released its industry-wide RIA mergers and acquisitions transaction report. According to the report, there were 109 M&A deals involving RIAs for the full-year 2010, the highest number of deals in a year since Schwab began tracking deal activity in 2003 and a significant increase from the 70 total deals tracked in 2009.*

The 109 total transactions in 2010 represent approximately $156 billion in total assets under management, compared to approximately $103 billion in assets under management in 2009. The average transaction size in 2010 was approximately $1.4 billion compared to approximately $1.5 billion in 2009. RIA firms were the most common buyers among 2010 deals, accounting for more than 50 percent of acquisitions, a trend that has continued since 2007.

Of the 109 deals tracked by Schwab in 2010, 58 percent of deals represented less than $500 million in assets under management, 23 percent of deals were between $500 million and $2 billion, and 19 percent of deals were greater than $2 billion.

“We saw a significant uptick in M&A deal activity among RIAs in 2010, largely due to advisors putting these discussions back on the front burner after spending the bulk of 2009 helping clients navigate the volatile market environment and managing the day-to-day business of their firms,” said David DeVoe, Schwab Advisor Services managing director of strategic business development. “Specific drivers of deal activity include advisors’ growing interest and sophistication in M&A and succession planning, continued interest of holding companies and private equity firms in RIAs, as well as advisor principal demographics.”

Schwab’s Transition Planning Resources for RIAs

Schwab’s Advisor Transition Services is designed to support advisors through each phase of the transition process including goal setting, evaluating options (internal succession, external sale, merger or acquisition) and executing a transition plan.

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

In addition to the Mergers & Acquisitions Listing Service, the program includes:

  • Educational events – Workshops, and webcasts led by industry experts covering strategic, valuation, organizational, legal and tax issues involved in succession planning, and acquiring and selling an independent advisory business.
  • Access to experts1 - Independent consultants, investment bankers, lawyers and accountants who have experience working with investment advisors on succession planning, mergers and acquisitions, and valuation.
  • Educational content – Articles and whitepapers including best practices and insights on valuation methods, legal considerations, succession planning, and mergers and acquisition case studies.

Additional information is available at www.SchwabTransition.com2

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 8.0 million client brokerage accounts, 1.5 million corporate retirement plan participants, 690,000 banking accounts, and $1.57 trillion in client assets as of Dec. 31, 2010. Through its operating subsidiaries, the company 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; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at www.schwab.com and www.aboutschwab.com. (0211-0926)

Follow us on Twitter: @Schwab4RIAs

* All data compiled and analyzed by Schwab Advisor Services Strategic Business Development. Data reflects firms being sold with assets under management exceeding $100 million between 1/1/10 and 12/31/10.

1 Some of the above services are provided by third-party firms who are not affiliated with nor employees of Schwab.

2 The information provided on the Site is for general information purposes only and is not intended to provide specific financial, accounting, tax, legal, or regulatory advice. Schwab makes no representations as to the accuracy or appropriateness of the information for any given situation.

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Contact:

Charles Schwab
Michael Cianfrocca, 415-667-0344
michael.cianfrocca@schwab.com
or
Makovsky + Co.
John McInerney, 212-508-9628
jmcinerney@makovsky.com

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Industry-Wide RIA Mergers and Acquisitions

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