ECHELON's RIA M&A Deal Report™
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ECHELON's RIA M&A Deal Report™
The acceleration continued a trend of rapid ... changes that could be introduced in 2021 by the new presidential administration. ... with effective processes and can serve as an excellent starting point for an acquirer…
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The 2020 ECHELON RIA M&A Deal Report
INVESTMENT BANKERS MANAGEMENT CONSULTANTS VALUATION EXPERTS to the Wealth and Investment Management Industries
Table of Contents
Executive Overview Section 1: Deal Activity, Key Findings, and Top Deals
Exhibit 1: M&A Activity Reaches Record High for the Eighth Straight Year Exhibit 2: $1 BN+ Transactions 2015-2020 | M&A Deals and Breakaways Exhibit 3: Strategics Continue to Lose Ground, RIAs Rebound Exhibit 4: Total Deal AUM Hits Record High for Seventh Year in a Row Exhibit 5: Average AUM per Deal Nears $2 BN Watermark Exhibit 6: Top 25 Deals by AUM Transacted Exhibit 7: The Most Active Acquirers of 2020 Section 2: Key Trends and Drivers of Wealth Management M&A Activity Exhibit 8: Average AUM per Deal Nears $2 BN Watermark Exhibit 9: Key Seller Objectives Exhibit 10: The 10 Top Private Equity Transactions Exhibit 11: Private Equity-to-Private Equity Transactions 2019-2020 Exhibit 12: Total Minority Transactions Exhibit 13: The 10 Top Minority Investment Transactions in 2020 Exhibit 14: Top Retirement-based Transactions of 2020 Exhibit 15: Top TAMP Transactions of 2020 Exhibit 16: Characteristics of Buyer's, Seller's, and Mixed Markets Section 3: WealthTECH M&A � Key Trends and Observations Exhibit 17: Dramatic Ascension of FinTech Fuels Evolution of WealthTECH Exhibit 18: M&A Transactions in WealthTECH Hits Record High in 2020 Exhibit 19: Top WealthTECH Deals Exhibit 20: WealthTECH Transaction Breakdown 2019 Exhibit 21: Direct Indexing Market Landscape Section 4: Wealth Management Breakaway Activity Exhibit 22: Reported Breakaway Activity Experiences a Sharp Decline Exhibit 23: Breakaways with AUM Over $1 BN in 2019 and 2020 Exhibit 24: Largest AUM Gained by the Firm Team Joins ($MM)
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Table of Contents
Exhibit 25: Largest AUM Lost to the Firm Team Departs ($MM) Frequently Used Terms About ECHELON Partners ECHELON Leadership Sample Transactions and Advisory Assignments Deals & Dealmakers Webcast Series 2020 Behind the Deal Podcast
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Dear Dealmakers,
Executive Overview
For the wealth management industry, 2020 will be remembered as the most remarkable period of M&A in the industry's history to date. M&A activity levels reached a new all-time high in 2020 � the eighth consecutive year that the number of deals in the industry has increased. This is an incredible accomplishment given the record levels of market volatility experienced earlier in the year and it sits against the backdrop of a pandemic-induced global economic slowdown that caused M&A activities in many other industries to come to a halt.
The total number of transactions, however, only tells part of the story of 2020. That is precisely why we have produced this 2020 ECHELON Partners RIA M&A Deal Report: Our objective with this research is to provide industry leaders with a data-driven assessment of the key developments in M&A � while also delivering an exclusive analysis of the fundamental influences and themes that are reshaping the current and future states of the industry and the overall wealth and investment management ecosystem.
In this edition of the ECHELON Partners' RIA M&A Deal Report, our proprietary research and analysis offers insights and perspectives into the following:
I. Overall Wealth Management Deal Activity and Top Deals of 2020: There were 205 deals that took place in 2020, a roughly 1% increase over the 203 deals recorded in 2019, which was the previous record. Notably, the second half of 2020 was by far the most active period in the history of the industry, with 124 deals or 61% of the total annual transactions taking place in Q3 and Q4. The 69 deals that occurred in Q4 are also a new high-water mark for a single quarter � and represented a 25% increase in activity over Q3 2020.
II. Drivers and Influencers of Wealth Management M&A: In addition to the record-breaking activity levels, there were 78 acquisitions of firms with $1 BN+ in assets � the most in a single year. In total, $318 BN in assets were acquired last year, and the average seller boasted $1.8 BN in AUM. Both were record levels, as buyers and sellers exhibited new levels of size and sophistication. The emergence of "Professional Buyers," an influx of capital from private equity, an accelerated interest in minority transactions, and strong valuations are among the drivers analyzed in this section of the 2020 Deal Report.
III. Developments in WealthTECH M&A: A convergence between wealth management, asset management, and technology was the driving force behind many of the year's 48 WealthTECH deals. In particular, M&A played a key role as asset managers evolved their offerings and searched for more efficient ways to deliver targeted, customized strategies to meet the evolving needs of institutional and individual clients.
IV. Key Trends in Breakaway Activity: Overall, the number of RIA breakaways declined by nearly 20% from 2019 � which was a record year for breakaway activity. The 2020 activity levels remained healthy and consistent with 2018 levels, but a notable trend developed that we believe will continue: There were 33 teams with more than $1 BN in assets that transitioned to the RIA channel in 2020, a new record for a single year. Like the growing number of $1 BN firms that sold in 2020, this development underscores the sophistication of breakaways and their interest in partners that can provide resources to accelerate growth, improve operational efficiencies, deliver improved client experiences, and reward operators with equity.
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Section 1: 2020 Wealth Management Deal Activity,
Key Findings, and Top Deals
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Findings and Top Deals
M&A deal volume reaches
its eighth straight record-
setting year.
Wealth Management M&A Activity Hits a New All-Time High in 2020: Despite the disruption to the global economy caused by COVID-19 throughout 2020, M&A activity in the wealth management industry reached a new record high in 2020 � the eighth straight record-setting year.
The year's total of 205 transactions is particularly impressive given the slowdown in activity that occurred in Q2, when the number of deals hit a four-year low (35) for a single quarter. Deal activity reached new quarterly highs in Q3 (55) and Q4 (69), powering 2020 to the most robust year for dealmaking in the industry's history.
Exhibit 1:
72.5%
M&A Activity Reaches Record High for the Eighth Straight Year
41.7%
50.0%
-4.0% -27.5%
11.8% -21.1%
26.3%
21.7%
10.0%
10.4%
181
168
138
7.7%
125
203 205
1.0% 12.2%
90
99
69
50
48
68
76
60
Wealth Management Transactions YOY % Change
2007 2008 2009 2010 2011 2012 2013 2014
Number of Transactions Note: Total AUM excludes deals with AUM $100 MM or lower Sources: Company Reports, SEC IARD, ECHELON Partners Analysis
2015 2016 2017 YOY % Change
2018
2019
2020
A Note on Deal Reporting in the Wealth and Investment Management Industries
It should be noted that tracking deal activity in the wealth and investment management industries is still largely an imprecise science for the following reasons:
1. Smaller Deals: Most deals involving firms with less than $100 MM in AUM go unreported and therefore are very difficult to identify.
2. Internal Deals: Deals inside a firm between partners also often go unreported and would likely need to involve a material amount of equity changing hands to have a chance of being officially recognized.
3. Hybrid Deals: Deals that are part recruiting and part equity sharing fall into this category and present an issue as to whether they should be included. They too are often not reported.
4. Breakaway Deals: With the definition of "breakaway" broadening to include more than only those instances in which an advisor is leaving a wirehouse, there is a blurring of what constitutes a breakaway and what doesn't. Also at play is how much equity has to change hands for a breakaway to become more of an M&A transaction.
5. Data Definition Rules: The general lack of clear deal categorization and data category definitions creates an issue regarding what truly constitutes a deal.
6. Data Consistency Over Time: As data series contents change over time, it is difficult to go back to prior years and add or delete deals that don't fit enhanced data definitions.
7. Tracking Date: ECHELON tracks deals as they are announced to the public. This date does not necessarily correlate with the deal's official close, as closing dates are less frequently reported, especially for smaller deals.
As a result of the above, we believe reported deal activity is likely one-third to one-fourth of the true deal activity. Therefore, we would encourage you to remain cognizant of these facts while you consider the information in this report.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Findings: $1 BN+ Transactions Surge to All-Time Highs
Exhibit 2:
$1 BN+ Transactions 2015-2020 | M&A Deals and Breakaways
$BN+ Wealth Mgmt. M&A Transactions $BN+ Breakaway Transactions
Deals for $1 BN+
111
wealth managers
surge in 2020,
fueled by well-
52
43
54
48
64 7
33
capitalized buyers.
24
20
25
16
57
78
28
23
29
32
2015
2016
2017
2018
2019
2020
Sources: Company Reports, SEC IARD, Investment News, and ECHELON Partners Analysis
$1 Billion+ Transactions and Transitions Shatter Previous Records
The economic uncertainty associated with the COVID-19 crisis and Q2's dramatic market downturn put a temporary hold on most dealmaking activity. As the market recovered, sellers with over $1 BN in AUM and larger buyers with dedicated deal teams and capital became more active, causing 2020 to see a massive 73% annual increase in the number of M&A deals and breakaways involving $1 BN+ wealth managers. The acceleration continued a trend of rapid M&A growth that began in 2019, yet it breaks the pattern of declining $1 BN+ breakaways that had been observed since 2017.
There is an ever-increasing buyer appetite for these large $1 BN+ AUM targets, and interest in this segment of the market was particularly robust in 2020 for the following reasons:
1. Professional Acquirers Have the Resources to Push Forward Despite Uncertainty: During 2020's early volatile period, larger buyers with dedicated management, M&A, and integration teams remained focused on their plans to identify and execute deals. Smaller sellers and acquirers were, in many cases, forced to divert their attention to portfolio management and client service in Q1 and Q2, distracting from a potential focus on M&A. Many larger buyers and sellers seized this opportunity, and once markets stabilized, resumed their normal deal processes. A number of firms accelerated discussions, as sellers were looking to close transactions before the end of 2020 in anticipation of potential tax changes that could be introduced in 2021 by the new presidential administration.
2. Large RIAs Are Ideal Platforms for Buyers: Large, $1 BN+ RIAs are professionally run firms with effective processes and can serve as an excellent starting point for an acquirer looking to enter a new industry or geography. New, sophisticated entrants to the wealth management M&A market are beginning to realize this, as evidenced by the continued growth of private equity's presence in the industry, increased interest from non-U.S. buyers (CI Financial), and the entrance of other institutional investors such as the Ontario Teachers' Pension Plan into the RIA M&A landscape.
3. Firms with $1 BN+ in AUM Are Established Businesses with Desirable Financial Profiles: Most $1 BN+ RIAs have steady revenue streams, over $3 MM in EBITDA, and profit margins that may easily exceed 30%. These reliable cash flows allow financial investors to confidently and aggressively finance transactions, while still providing a significant opportunity for upside potential and growth post deal.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Findings: RIAs Lead the Way, Driving 2020 Activity
RIAs: RIAs completed 38% of acquisitions in 2020, closing 78 deals and becoming the most active type of acquirer in 2020, a development that has not been seen since 2016. Even as the most active type of acquirer in 2020, RIA's share of total deals remains below the category's share of deals between 2009 and 2016 when these firms were regularly responsible for well over 40% of all deals completed. This is mostly due to the expansion of the "Other" category � which includes private equity � in the past two years.
We use the "RIA" label to describe those firms that have completed fewer than four mergers or acquisitions, are generally smaller in their strategic reach, and usually have more modest financial resources. Therefore, transactions involving RIA acquirers tend to involve smaller deals than the other categories.
Strategic Buyers or Consolidators: Strategic acquirers completed 66 total deals in 2020, or 32% of the year's total count. This is the category's lowest share of total deals since 2013 and marks a significant decline on both an absolute and percent basis from 2019, when the category's 83 deals accounted for 41% of transactions. Among the most active strategic acquirers was CI Financial, which announced nine transactions as it continued its aggressive push into American markets. Following CI was Hightower Advisors, which announced eight transactions in a banner year. Creative Planning and Mercer Advisors were the two strategics with the next-most deal announcements.
It is worth noting that this group is not all roll-up firms. Instead, it represents primarily firms that a) already have a platform, b) have considerable industry presence, and c) have completed more than four M&A transactions.
Exhibit 3:
Strategics Continue to Lose Ground, RIAs Rebound
RIAs and private equity firms (Other)
increased their share of deal
activity.
14% 25%
13% 19%
12% 15%
20% 6%
16% 18%
21% 14%
15% 7%
12% 8%
13% 6%
12% 7%
10% 10%
14% 12%
23% 9%
26% 4%
31%
33%
31%
30%
23%
34%
31%
35%
42%
40%
44%
47%
41%
32%
30% 36% 42% 44% 44% 31% 47% 45% 39% 42% 36% 27% 28% 38%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
RIA Strategic or Consolidator Bank Other
Sources: Company Reports, SEC IARD, ECHELON Partners Analysis
Banks: Banks held their place as the least active category in terms of deal activity, announcing only seven deals throughout the course of the year. Emigrant Partners, which announced four transactions in 2020, all involving AUM of over $2 BN, remains the most active player in the segment by far.
Other: The Other category continued its growth with another record year as the buyer landscape continues to shift. 2020 saw the first action by a SPAC in the RIA M&A landscape and the continued growth of private equity's interest in the industry.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Findings: Assets Acquired Hit Record Level
Exhibit 4 highlights the large increase in the aggregate AUM transacted since 2013. Total AUM transacted grew at 34% annually during this period, while the total deal count increased by only 12%, indicating that large transactions are becoming increasingly common. This was especially true in 2020, which saw a 37% increase in the number of $1 BN+ AUM transactions compared to the previous year. Total deal AUM has been growing, but at a slower rate since 2018, with 2020's growth equaling less than half of 2019's growth rate.
YOY % Change
Exhibit 4:
Total Deal AUM Hits Record High for Seventh Year in a Row
Cumulative AUM transacted has increased over 34% annually
since 2013.
41,081
111.7%
318,629 285,040
229,744
52,960 28.9%
169,646 144,321 112,136
28.7%
17.5%
35.4%
24.1%
11.8%
Total AUM Acquired ($MM)
2013 2014 2015 2016 2017 2018 2019 2020
Total Deal AUM
YOY % Change
Note: Total AUM excludes deals with AUM of $20 BN or higher and $100 MM or lower Sources: Company Reports, SEC IARD, ECHELON Partners Analysis
Exhibit 5 showcases that average AUM per M&A transaction continues to increase, topping $1.8 BN and exceeding 2019's previous record by 23.3%. This represents the fifth year in a row that average deal size has exceeded $1 BN in AUM. If the economy remains steady and the trend of increasing interest in the industry from well-capitalized buyers � namely private equity firms and long-term capital partners � continues, the increases could easily continue into 2021 and push average AUM per deal past the $2 BN threshold.
Exhibit 5:
Average AUM per Deal Nears $2 BN Watermark
66.1%
1,821
YOY % Change
Average AUM per reported deal reaches another record.
1,269
1,477
1,046
1,010
897
25.6%
23.3%
456
540
16.4%
18.4%
16.6%
-3.4%
Total AUM Acquired ($MM)
2013 2014 2015 2016 2017 2018 2019
Average AUM of Acquired RIAs ($MM)
YOY % Change
Note: Total AUM excludes deals with AUM of $20 BN or higher and $100 MM or lower Sources: Company Reports, SEC IARD, ECHELON Partners Analysis
2020
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
The 25 Largest Deals of 2020
Exhibit 6:
Top 25 Deals by AUM Transacted
Seller
Buyer
Buyer Type
E*TRADE
Morgan Stanley
Mass Mutual (Retirement Plan Division)
Empower Retirement
Fiduciary Investment Advisors
DiMeo Schneider & Associates (NFP)
Bank Other RIA
Wilshire Associates
CC Capital, Motive Partners Other
Waddell & Reed Financial
Hightower Advisors
Creative Planning Resources Investment Advisors CAPTRUST Advisors ICONIQ Capital
LPL Financial Goldman Sachs Asset Management; Neuberger Berman; Coller Capital General Atlantic
OneDigital
GTCR Dyal Capital Partners
Other
Other
Other Other Other Other
NWPS Dynasty Financial
Brinker Capital
Stratos Wealth Holdings Stanhope Capital Group
Raymond James 1248 Holdings Orion, Genstar Capital, TA Associates Emigrant Bank FWM Holdings
Other Other
Other
Bank Other
Personal Capital Sanctuary Wealth Partners Beacon Pointe
Allworth Financial
Empower Retirement Azimut Abry Partners Lightyear Capital/Ontario Teachers' Pension Plan Board
Other Other Other
Other
CornerStone Partners
Focus Financial
Strategic or Consolidator
Goss Advisors
Mid Atlantic Capital Group (Parthenon Capital)
Other
EP Wealth Advisors
Berkshire Partners
Other
Plante Moran Financial Advisors Fifth Third Bank (Retirement Plan Division)
Athena Capital Management
CAPTRUST
Empower Retirement Fiduciary Trust International (Franklin Templeton)
Sources: Company Reports, SEC IARD Website, ECHELON Partners Analysis
Strategic or Consolidator Other
RIA
Seller AUM ($MM) 360,000
167,000
Date 2/21/2020
9/8/2020
84,000 1/31/2020
73,000 63,000
10/2/2020 12/3/2020
61,600 10/22/2020
50,000 2/7/2020
45,000 2/6/2020
45,000 39,634 35,000 32,000
6/2/2020 11/10/2020 12/10/2020
4/16/2020
24,500 6/29/2020
14,500 13,000 12,200 12,000 11,500
4/1/2020 11/24/2020
6/29/2020 11/2/2020
3/9/2020
10,000 10/20/2020
8,900 11/2/2020
8,000 11/20/2020 6,930 9/30/2020 6,270 9/10/2020 6,210 9/29/2020 6,000 1/7/2020
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Deal Timeline & Commentary
Here we outline the year's most prominent and influential deals � ultimately, those that best represent the themes and transformations that defined 2020. This year's deals signal the following trends: 1) consolidation among the largest firms, 2) the prevalence of professional buyers, 3) heightened private equity interest in the independent channel, 4) a race to build a robust WealthTECH product suite, and 5) the aggregation of retirement planning assets.
January
March
May
July
September
November
Acquired
AUM - $84.0 BN
Acquired a Minority Interest in
AUM - $11.5 BN
cAcquired
AUM - $4.0 BN
Acquired a Minority Interest in
AUM - $4.7 BN
Acquired the Retirement Business of
Acquired a Minority Interest in
AUM - $167.0 BN
AUM - $39.6 BN
February
April
June
August
October
December
Acquired
Acquired a Minority Interest in
AUM - $360.0 BN
AUM - $14.5 BN
Acquired a Minority Interest in
AUM - $45.0 BN
Acquired
AUM - $4.5 BN
Acquired
Acquired the Wealth Management Division of
AUM - $10.0 BN
AUM - $63.0 BN
Acquired Acquired
January 2020
Who: DiMeo Schneider & Associates acquired Fiduciary Investment Advisors What: $84.0 BN AUM How: Majority interest Why: The two firms have a history of collaboration and have shared the same
fiduciary governance calendar and 401(k) fee benchmarking data set. Executives for both firms stated that the merger will naturally allow them to continue this relationship in a more formal manner. The deal also allows both firms to continue their expansion across the country as the combined entity will now have a presence in 47 states � creating one of the largest national RIAs in the industry.
February 2020
Who: Morgan Stanley acquired E*TRADE What: $360.0 BN AUM | $13.0 BN Transaction Value How: Majority interest all-stock transaction where E*TRADE common
shareholders received 1.0432 Morgan Stanley common shares for each E*TRADE common share. Why: Morgan Stanley's acquisition will enable the firm to leverage E*TRADE's wealth management and RIA custody services. Specifically, E*TRADE's bespoke direct-to-consumer offering will allow Morgan Stanley to increase its share of both the mass affluent and HNW markets.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Top Deal Timeline & Summary
Acquired a Minority Interest in
Acquired a Minority Interest in
Acquired
March 2020
Who: What: How: Why:
Abry Partners acquired a minority interest in Beacon Pointe Advisors $11.5 BN AUM Minority interest Abry Partner's investment allowed Beacon Pointe to recapitalize and pursue an increased number of acquisitions in a competitive market. Beacon Pointe's dealmaking activity has picked up after the Abry investment, with five transactions totaling $2 BN of AUM added since the Boston private equity firm took a minority stake.
April 2020
Who: What: How: Why:
Emigrant Partners acquired a minority interest in Stratos Wealth Partners $14.5 BN AUM Minority interest Emigrant's strategic minority stake will provide Stratos with the capital to reinvest in the firm's current affiliate business partnership offering. The funds will enable Stratos to expand its affiliate program and unaffiliated programs, respectively. Furthermore, Stratos will benefit from the bespoke banking solutions offered by Emigrant.
May 2020
Who: What: How: Why:
Fiduciary Trust International acquired Pennsylvania Trust $4.0 BN AUM Majority interest Fiduciary Trust International, a subsidiary of Franklin Templeton, expanded its national footprint with the acquisition of Pennsylvania Trust. This transaction and its other 2020 acquisition, Athena Capital, added $10 BN of AUM to the global wealth manager.
Acquired a Minority Interest in
Acquired a Minority Interest in
June 2020
Who: What: How: Why:
GTCR acquired a minority interest in CAPTRUST $45.0 BN AUM | $1.25 BN Transaction Value Minority interest GTCR's 25% investment reflects an impressive $1.25 BN enterprise value for the national RIA and retirement plan manager. Since 2006, CAPTRUST has been an active acquirer � completing over 40 transactions. The GTCR investment will enable further dealmaking and investment in the business. Following the GTCR investment, CAPTRUST acquired three firms.
July 2020
Who:
What: How: Why:
Kudu Investment Management acquired a minority interest in Sequoia Financial Group $4.7 BN AUM Minority interest Kudu's long-term capital solution will allow Sequoia to accelerate their U.S. expansion plans. Sequoia will continue to be employee majorityowned following the transaction.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Top Deal Timeline & Summary
August 2020
Acquired
Who: What: How: Why:
CI Financial acquired Balasa Dinverno Foltz (BDF) $4.5 BN AUM Majority interest CI Financial entered the U.S. wealth management market in late 2019 and has since been one of the most active acquirers in the industry. Balasa Dinverno Foltz was its largest transaction of the year. The acquisition expands CI Financial's market share in the Midwest and adds an elite management team to its growing network of firms.
September 2020
Acquired the Retirement Business of
Who: What: How: Why:
Empower Retirement acquired the retirement business of Mass Mutual $167.0 BN AUM Majority interest Empower's acquisition of MassMutual's retirement plan business underscores the consolidation of retirement planning firms and platforms, a trend that crystalized in the wealth management space in 2020. Empowers' record-keeping assets grew to $884 BN following the transaction, cementing its position as the second largest in said industry.
October 2020
Acquired
Who:
What: How: Why:
Lightyear Capital and the Ontario Teachers' Pension Plan acquired Allworth Financial $10.0 BN AUM Majority interest In a private equity-to-private equity, transaction Parthenon Capital sold its stake in Allworth to Lightyear Capital and the Ontario Techers' Pension Plan. Allworth, which grew its AUM to $10 BN last year from $2.7 BN in 2017, is one of the fastest-growing firms in the industry, and a recap from private equity will enable further growth.
November 2020
Acquired a Minority Interest in
Who: What: How: Why:
Dyal Capital Partners acquired a minority interest in ICONIQ $39.6 BN AUM Minority interest Dyal typically only invests in private equity GP stakes, and its investment in ICONIQ is unique as it not only participates in the revenue generated from ICONIQ's proprietary private equity investment funds but also in management fees from the multifamily office. ICONIQ is an elite investment and wealth manager based in Silicon Valley.
December 2020
Acquired the Wealth Management division of
Who:
What: How:
Why:
LPL Financial acquired the wealth management division of Waddell & Reed Financial $63.0 BN AUM | $300 MM Transaction Value Majority interest acquired by LPL from Macquarie Group, who acquired Waddell & Reed and carved out the wealth business LPL Financial's acquisition will add 921 intendent advisors with $63 BN AUA. The deal also included a long-term strategic sponsorship with Macquarie.
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Exhibit 7:
The Most Active Acquirers of 2020
Buyer CI Financial Hightower Advisors
Buyer Type Strategic or Consolidator Strategic or Consolidator
AUM Acquired ($MM)1
27,420
10,770
Number of Deals1
9
8
Creative Planning
RIA
5,054
8
Focus Financial
Strategic or Consolidator
14,378
7
Mercer Advisors
Strategic or Consolidator
2,627
7
LPL Financial
Other
67,760
5
Emigrant Bank
Bank
24,700
5
CAPTRUST
Strategic or Consolidator
11,059
5
Wealth Enhancement Group
Strategic or Consolidator
6,183
5
EP Wealth Advisors
Strategic or Consolidator
2,353
5
Buckingham Strategic Wealth (Focus Financial) Strategic or Consolidator
1,983
5
1This breakdown does not include sub-acquisitions made by respective buyers' partner firms.
Exhibit 7 displays 2020's most active acquirers in the wealth management industry. CI Financial, Canada's largest asset manager as measured by its $216 BN AUM, was first in activity followed by Thomas H. Lee-backed Hightower Advisors and General Atlantic-backed Creative Planning.
In Canada, CI Financial has a history of M&A and has executed a number of acquisitions since its founding in 1965. It embarked on a new M&A strategy in 2019 as it entered the U.S. wealth management business for the first time and announced an impressive nine transactions averaging just over $3 BN AUM transacted per deal in 2020. Led by Kurt MacAlpine, former Executive Vice President and Head of Global Distribution for WisdomTree Asset Management, the Canadian buyer has lofty ambitions to further grow its network of firms, realize synergies associated with service enhancements, offer an improved choice of investment solutions, and create cross-border referrals. CI's entrance into the market has increased competition in deal processes, and we expect its aggressive acquisition pace to continue into 2021.
Hightower Advisors announced a recapitalization and secondary transaction in 2020 and continues to be a serial acquirer of wealth managers, announcing eight with an average AUM of $1.3 BN transacted per deal. Hightower's platform now boasts over $60 BN AUM, including the recently announced and largest transaction to date of $8 BN AUM Los Angeles-based Bel Air Investment Advisors (which is not included in its 2020 count as it was announced in 2021). Hightower acquired Bel Air from Fiera Capital, a large Canadian asset manager and competitor of CI Financial, which is divesting from its U.S. wealth management business. One enters and another exits, yet the trend of Canadian asset managers aggregating U.S. wealth managers looks set to continue.
Peter Mallouk's Creative Planning was also active and announced eight transactions, bringing the firm's total to 10 deals in the past two years. Creative Planning's average AUM transacted was $630 MM, demonstrating a focus on slightly smaller wealth managers.
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Section 2: Key Trends and Drivers of Wealth Management M&A Activity
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ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Trends: The Evolution of Buyers and Sellers
The M&A landscape evolved significantly in 2020. Notably, there were several key trends that motivated and defined deal activity throughout the year and shaped the characteristics of the year's major players:
� Seller size and sophistication were at an all-time high � Professional buyers drove an increased portion of deal activity � New entrants and private equity continued to provide currency and capital for acquisitions � Increased competition among buyers, coupled with strong market conditions, created
attractive valuations for sellers
The seeds for these trends had been planted years ago, but they were more consistently present in dealmaking activity in 2020 than in any other year.
There was a clear and growing appreciation for the wealth management business, and its often stable streams of recurring revenues and strong earnings, at a more global level. At the same time, the limited supply of $1 BN+ RIA firms � coupled with the rising number of buyers with business models that are dependent on inorganic growth � accelerated deal activity and increased the number of opportunities and options available to sellers.
Spotlight on Sellers
� Seller Size and Sophistication: While dealmaking activities once again surged to record highs, the size and sophistication of sellers notably reached new levels in 2020. Examining the 205 sellers in 2020, the average firm had $1.8 BN in assets under management � the highest levels tracked by ECHELON to-date and a roughly 19% increase over the $1.5 BN in assets in 2019, the previous record high. This was the eighth consecutive year that the average seller's assets increased, and 2020 also registered as the largest year-over-year increase on record, as noted in Exhibit 8 below.
� Succession Solutions: A wide range of factors have contributed to this significant increase. At a macro level, a number of established firms have been considering or actively pursuing succession options as their founders age and look to transition out of the industry. For $1 BN+ firms, in particular, the growing number of buyers and additional capital that was injected into the industry in recent years created compelling opportunities in 2020.
Exhibit 8:
Average AUM per Deal Nears $2 BN Watermark
Average AUM
1,269
per reported
897
1,046 1,010
deal reaches
another record. 456
540
1,477
1,821
2013 2014 2015 2016 2017 2018
Note: Total AUM excludes deals with AUM of $20 BN or higher and $100 MM or lower Sources: Company Reports, SEC IARD, ECHELON Partners Analysis
2019
2020
16
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Key Trends: Seller Objectives
Seller Objectives: As larger, more established sellers navigated the range of M&A opportunities that emerged in 2020, three priorities and objectives were consistently present as they evaluated options, buyers, and post-deal considerations:
1. The ability for firm owners to "sell and stay" for a defined period of time after a deal closes � and ultimately participate in the growth opportunities created by the combined entities. o A growing number of deals in 2020 were structured to enable this alignment, which is designed to benefit both sellers and buyers, and creates the potential for higher deal valuations if post-close targets and goals are met.
2. Unlocking growth and synergy values. The number of buyers, their maturity and the benefits of scale that institutions can provide to advisors were key considerations for many sellers in 2020. o Sellers now have a greater ability to tap into larger, national firms that can often introduce a wealth manager to new markets, a deeper set of prospects, and advanced marketing capabilities. o At the same time, as buyers have further built their infrastructure and centralized resources, sellers have more options to offload their technology, investment management, or non-core operations. o In the process, sellers acquire the time, resources, and capacity to focus on accelerating organic growth and increasing the value of their businesses.
3. Career development and growth opportunities for G2. As founders sought to initiate their transitions out of the business, buyers that could present career paths and continued growth opportunities to remaining employees were particularly attractive to sellers. o A typical $1 BN RIA, for example, can often have 15-25 employees. Continuity in the business � for clients, employees, and the buyer � is an essential ingredient for a successful integration and long-term growth.
Exhibit 9:
Key Seller Objectives
Full Exit
Refine Role & Plan for Exit
Alignment and Growth
Founders are looking to exit the business in 1 year or less.
This allows for a quick exit but possibly sacrifices deal consideration for the sellers.
Founders desire an opportunity where they can remain with the business for
1-3 years.
The deal will likely be structured to allow partners to earn extra consideration for driving additional growth in this 1�3-year time frame.
Founders are looking to exit in 1-3 years and secondgeneration partners are
looking to maintain and grow the value of their stakes.
The deal will be structured to align buyers' and sellers' interests to incentivize growth and provide career opportunities for the firm's current employees.
17
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Private Equity Transactions
Exhibit 10:
The Top Private Equity Transactions
Seller Wilshire Associates Hightower Advisors Creative Planning
Buyer
CC Capital, Motive Partners Thomas H. Lee Partners: Goldman Sachs Asset Management; Neuberger Berman; Coller Capital
General Atlantic
Buyer Type Private Equity
Seller AUM ($MM)
73,000
Private Equity
61,600
Private Equity
50,000
CAPTRUST Advisors
GTCR
Private Equity
45,000
ICONIQ Capital
Dyal Capital Partners
Private Equity
39,634
Date 10/2/2020
10/22/2020
2/7/2020 6/2/2020 11/10/2020
Beacon Pointe
Abry Partners
Private Equity
11,500
3/9/2020
Allworth Financial EP Wealth Advisors Sequoia Financial Group
Lightyear Capital/Ontario Teachers' Pension Plan Board
Private Equity
Berkshire Partners
Private Equity
Kudu Investment Management, LLC
Private Equity
10,000 6,930 4,700
10/20/2020 9/30/2020 7/8/2020
Exhibit 10 showcases private equity's growing presence in the wealth management industry. There were 75 PE firms investing in the space in 2008 prior to the economic crash, and that amount has crept up to over 275 firms presently.
The Advantages of Private Equity � As more private equity firms enter the wealth management market, financial advisors are
presented with more options for a) selling their company and b) gaining a partner for growth and development. � The increased interest in wealth management also creates more competition among PE firms, which often drives up valuations. Perceived increases in valuation often far outweigh the reality of crafty deal structuring. On the surface, this can cause deals to look better than they really are. � Relative to other growth industries, the vast majority of wealth managers are presently undervalued. Given the organic growth, recurring revenues, and relative stability of the industry, wealth management is a premium industry � and the influx of capital from PE firms will play a major role in raising the profile and increasing the value of wealth managers.
10 Total
Direct Private Equity Deals in
2020
$303 BN
Total Assets Involving Direct Private Equity Investments in 20201
1. Excludes acquisitions made by private equity firms' portfolio companies.
18
ECHELON PARTNERS RIA M&A DEAL REPORT TM
The Disadvantages of Private Equity
� As PE firms become more ingrained in the industry, the economics shift to benefiting the investors far more than the financial advisors.
� This so-called "risk" capital would be hard pressed to find a better risk/return relationship in any other industry.
� While one day the PE investing could set off price competition, for now there are more signs of them setting off price increases.
As seen in Exhibit 11, there has been an increase in private equity-to-private equity transactions over the past 24 months. The largest was Lightyear Capital's sale of Advisor Group to Reverence Capital Partners. Reverence Capital Partners purchased 75% of Advisor Group from its shareholders, with Lightyear Capital, PSP Investments, and all other shareholders maintaining up to a 25% share, signaling their continued optimism in a national platform that hosts over 7,000 advisors. Maintaining a stake, or "rolling equity," is a common theme of the transactions listed below as sellers look to benefit from continued upside from their investment. In fact, all the transactions listed below involved the seller's rolling equity, with exception to Lightyear Capital's sale of Wealth Enhancement Group to TA Associates.
Exhibit 11:
Private Equity-to-Private Equity Transactions 2019-20201
Portfolio Company Advisor Group
Private Equity Seller Private Equity Buyer
Lightyear Capital, PSP Investments
Reverence Capital Partners
Seller AUM ($MM)
268,000
Date 5/9/2019
Kestra Financial
Stone Point Capital Warburg Pincus
75,800 2/25/2019
Hightower Advisors
Thomas H. Lee Partners
Mercer Advisors
Wealth Enhancement Group
Lovell Minnick, Genstar
Lightyear Capital
Thomas H. Lee Partners;2 Goldman Sachs Asset Management; Neuberger Berman; Coller Capital
Oak Hill Capital
TA Associates
61,600 10/22/2020
16,500 12,000
9/19/2019 7/31/2019
EP Wealth Advisors
Wealth Partners Capital Group
Berkshire Partners
6,930 9/30/2020
1. Excludes acquisitions made by private equity firms' portfolio companies. 2. Thomas H. Lee Partners made a secondary investment in Hightower alongside several other asset managers and private equity firms.
6 Total
PE-to-PE Transactions in
2019-2020
$440 BN
Total AUM Transacted in PEto-PE Transactions
in 2019-2020
19
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Minority Transactions
A Surge in Minority Transactions
M&A in the wealth management industry has traditionally been fueled by succession planning needs and the ability to create liquidity events for firm founders as they approached retirement.
However, in 2020, a substantial number of transactions involved wealth management firms that sold a minority stake in their business. This has allowed a growing number of firms to retain ownership and control � while at the same time accessing a partner who can help accelerate short- and long-term growth.
2020 Minority Deal Activity: Specifically, as Exhibit 12 notes below, there were 26 minority transactions in 2020, which is more than three times the number of minority acquisitions that took place in 2019.
Exhibit 12:
Total Minority Transactions 26
Total Minority Transactions
YOY %
8
225%
Change from
2019 to 2020
2019
2020
Deal Count
While the number of minority deals increased exponentially, the size of these transactions also increased dramatically: The average seller in a minority transaction boasted assets under management of $3.4 BN � a 49% increase over the 2019 average of $2.3 BN.
Minority Transactions � 8 Motivators: A number of factors motivated wealth management firms to consider and execute minority transactions, a strategy that ECHELON believes will continue well into 2021 and beyond:
1. Taking Chips Off the Table: Founders have embraced the opportunity to diversify single stock positions in their companies, pay down debt, and make personal investments outside of their firms.
2. Taking Advantage of Markets: Overall, equity markets surged in 2019 and 2020, setting a record for the longest market expansion in history. This provided a clear and compelling opportunity to "sell high," and many of the discussions leading to 2020 transactions began near the end of 2019.
3. Retaining Control, Fueling New Growth: Private equity companies typically want to buy all, or at least 80% of, the wealth managers they are evaluating. After hearing many pitches from private equity investors, sellers recognize that they have a strategic advantage and are angling to keep more equity in exchange for assistance with growth.
20
ECHELON PARTNERS RIA M&A DEAL REPORT TM
4. Acquiring M&A Expertise and Dealmaking Experience: Some advisory firm owners have dabbled with M&A but are often outbid by larger, more seasoned dealmakers. A growing number of firms are now affiliating with a "platform" to help with sourcing, deal execution, and financing to improve their experience and success rates in future M&A activity.
5. The Desire for Economies of Scale: The platforms driving minority acquisitions are promising to provide lower pricing for all services � including custody, investment management, technology, and compliance � which could allow advisors to focus on core competencies and generate higher profit margins.
6. A Solution to Buy Out Retiring or Silent Partners: Many multi-partner firms are exploring options to buy out partners who are approaching retirement or are silent investors in their businesses. The evolution of platforms and minority acquirers provides a precise solution to cash out a minority partner while also contributing resources that could accelerate future growth.
7. The Ability to Fly Low: When the acquired stake is below 20%, the change in ownership does not require the approvals of the firm's clients.
8. First Step Before a Larger Deal: Minority investments let advisors evaluate a partner before engaging in a bigger deal. They also allow the advisors to maintain control and determine when � or if � they should sell the rest of the company.
Exhibit 13:
The Top 10 Minority Investment Transactions in 2020
Seller Creative Planning CAPTRUST Advisors ICONIQ Capital Dynasty Financial Stratos Wealth Holdings
Buyer
Buyer Type
General Atlantic GTCR
Other Other
Dyal Capital Partners
Other
1248 Holdings
Other
Nesvold Capital Partners Other
Seller AUM ($MM) 50,000 45,000
39,634
32,000 15,000
Date 2/7/2020 6/2/2020 11/10/2020 4/16/2020 9/29/2020
Stratos Wealth Holdings
Emigrant Bank
Bank
14,500
4/1/2020
Beacon Pointe EP Wealth Advisors Sequoia Financial Group
Corient Capital Partners
Abry Partners
Berkshire Partners
Kudu Investment Management Merchant Investment Management
Other Other Other
Other
11,500 6,930 4,700
3,100
3/9/2020 9/30/2020
7/8/2020
9/21/2020
26 Total
Minority Transaction Deals
in 2020
$241 BN
Total Minority Transaction AUM
21
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Retirement Transactions
Consolidation and Convergence: The convergence of wealth management and retirement plan advice was a notable theme that emerged over the course of 2020 � a theme that we believe will continue to be a driving force behind M&A activity in 2021.
While there were only seven transactions that involved retirement plan advisors with greater than $100 MM in assets and/or retirement platforms, they were responsible for three of the ten largest deals last year, with a total of $257 BN in combined assets under management.
In the retirement advice segment, advisory firms that specialize in servicing defined contribution plans typically have significantly lower margins than traditional wealth managers, which often have profit margins of roughly 25%.
Economies of Scale: As fee compression and regulatory and compliance pressures have further squeezed the margins of retirement plan advisors, more of these firms have become acquired by aggregators such as CAPTRUST, Sageview, and GRP � companies that can help create economies of scale and improved margins through centralized support and operations.
Many of these larger firms are also actively in the process of acquiring wealth management firms to improve their margins and expand their services. Specifically, this provides an opportunity to develop a new base of wealth management clients by leveraging thier access to plan sponsors and plan participants.
The Participant Opportunity: This convergence opportunity also motivated retirement recordkeepers and benefits providers. Empower Retirement, in particular, was the most opportunistic in 2020.
Its acquisition of Personal Capital now provides the firm with a technology platform and infrastructure that will allow the Denver-based company to differentiate its business from other record-keepers � while also providing Empower with the opportunity to introduce Personal Capital's financial planning capabilities to its 13 million plan participants. More than two million of these participants, notably, were added by the September acquisitions of MassMutual and Fifth Third's Retirement Plan Divisions.
Exhibit 14:
Top Retirement-based Transactions of 2020
Seller
Buyer
Buyer Type
Mass Mutual (Retirement Plan Division)
Empower Retirement
Other
Resources Investment Advisors CAPTRUST Advisors Personal Capital
OneDigital GTCR Empower Retirement
Plante Moran Financial Advisors CAPTRUST
Other Other Other
Strategic or Consolidator
Fifth Third Bank (Retirement Plan Division)
Empower Retirement
Other
Baystate Fiduciary Advisors
Hub International Limited Other
Seller AUM ($MM)
167,000
45,000 45,000 12,200
6,270
Date
9/8/2020 2/6/2020 6/2/2020 6/29/2020 9/10/2020
6,210 9/29/2020 2,900 11/11/2020
22
ECHELON PARTNERS RIA M&A DEAL REPORT TM
TAMP Transactions
Turnkey asset management platforms ("TAMPs") power the back- and middle-office functions of wealth managers with investment products, technology, client servicing tools, and operations support. They optimize the wealth management process and are integral to the financial advisor ecosystem. In terms of dealmaking in 2020 and beyond we see the following trends:
Consolidation from Major Industry Players
According to ECHELON research, the top 15 TAMPs control over 90% of the industry's assets. Concentration has increased in recent years as the largest platforms consummated acquisitions. 2020 saw both mega transactions, such as the Orion-Brinker Capital merger, as well as many subscale acquisitions. Consolidation is likely to continue as smaller platforms struggle to compete with the major industry players such as Envestnet, AssetMark, and SEI. ECHELON was proud to represent two of the largest deals of the year as a sell-side advisor to Goss Advisors in its sale to EdgeCo Holdings/Parthenon Capital and sell-side advisor to OBS Financial in its sale to AssetMark.
Private Equity Interest Increasing
Genstar Capital and TA Associates supported the $40 BN Orion-Brinker Capital merger. TA Associates originally invested in Orion in 2015 and would have benefited from the platform's meteoric rise while Genstar Capital is familiar with the TAMP sector as it previously invested and realized an investment in AssetMark, which now services ~$55 BN in AUM. Other notable sponsor-backed transactions included Goss Advisors' sale to Parthenon-backed EdgeCo and FormulaFolios' sale to Thomas H. Lee-backed Brookstone/Amerilife.
Insurance Companies and Asset Managers Seeking TAMP Platforms
As the buyer pool expands, we have observed more insurance companies and asset managers expressing interest in TAMPs and their financial advisor communities. This is exemplified by Italian asset manager Azimut's majority investment in Sanctuary Wealth and insurance behemoth, Amerilife, and its involvement with Brookstone and its sub-acquisition of FormulaFolios.
Exhibit 15:
Top TAMP Transactions of 2020
Seller Brinker Capital
Buyer
Orion, Genstar Capital, TA Associates
Seller AUA ($MM)
24,500
Date 6/29/2020
Sanctuary Wealth
Azimut
12,000
11/2/2020
Cornerstone Wealth Management Focus Financial
Goss Advisors FormulaFolios
EdgeCo Holdings/Parthenon Capital
Brookstone Capital Management/Amerilife, T.H. Lee
OBS Financial
AssetMark
8,900 7,900 3,640 2,000
11/2/2020 11/16/2020
7/8/2020 2/3/2020
23
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Was 2020 a Buyer's or Seller's Market?
While M&A activity experienced dramatic shifts between all-time highs and relative (albeit brief) lows in 2020, the underlying characteristics and fundamentals for the market remained remarkably consistent. We are frequently asked to categorize the state of the M&A market as a buyer's or a seller's market � and throughout 2020, that question was more prevalent than ever.
The answer: 2020 was a mixed market. Exhibit 16 below outlines the general characteristics of each market type and the four primary drivers that define the market. Based on our research and experience, we believe that 2020 was a mixed market for several reasons:
� Valuations: While valuations were quite strong in 2020 relative to prior years, they have still not reached the levels that we believe would accurately reflect the value of wealth managers' premium revenues, earnings, business models, and growth potential.
� Deal Structures: We believe deal structures are also mixed. Many sellers have received favorable structures that provide them with the opportunity to lean in and get extra benefits. Buyers are becoming increasingly creative, and structuring terms with earnout and clawback characteristics. These structures work well if sellers can perform, but also protect the buyers in the process.
� Number of Sellers: While 205 was the largest number of deals in a year and the number of sellers has steadily increased, it still represents just 5.7% of the 3,600 firms with greater than $100 MM in assets.
� Number of Buyers: While there are a number of interested and potential buyers that became more visible in 2020, most of the buying was actually done by just a small number of firms: 48.8% of the 205 acquisitions were made by the top 20 acquirers.
Additional Contributors in 2020
For some sellers, the COVID-19 pandemic and related economic fallout in early 2020 may have had a negative impact. Smaller sellers, in particular, who might have been more reactive were unable to recognize full value in a transaction. Larger firms that had the ability to be patient, along with the financial wherewithal to structure favorable terms, benefited.
In addition, with a growing number of professional buyers, there are now more firms consistently committed to engaging in M&A, regardless of market cycles. This is a commitment that we are likely to see in future cycles, whereas in past cycles the buyer community would often dry up during downturns.
Exhibit 16:
Characteristics of Buyer's, Seller's, and Mixed Markets
Valuations Deal Structures
# of Sellers
# of Buyers
Buyer's Market Low
Terms Favor Buyers
Many
Seller's Market High
Terms Favor Sellers
Few
Few
Many
Mixed Market Medium
Terms Don't Favor Either Medium # Low Drivers 50 Seasoned
Rest Are Dabblers
24
Section 3: WealthTECH M&A: Key Trends and Observations
25
ECHELON PARTNERS RIA M&A DEAL REPORT TM
WealthTECH M&A Deal Activity
Over the past decade, financial technology ("FinTech") has gone from being an underappreciated niche barely represented in Silicon Valley to becoming one of the fastestgrowing and hottest sectors in the tech industry. The FinTech label is applied to almost any startup that is trying to use technology to solve a financial problem and covers industries as diverse as insurance, brokerage, data analytics, banking, cash management, and tax planning. With all the interest and investment in this space, an ecosystem has developed, the main sectors of which are outlined in Exhibit 17.
Given ECHELON's focus on the subset of FinTech companies related to wealth management, in the spring of 2016 we coined the label "WealthTECH" to begin developing a sub-ecosystem for tracking the investment and development activity of these companies. Presently, we have mapped over 500 companies and their services to the six WealthTECH categories listed in Exhibit 17. There is a great deal of activity in this space as entrepreneurs rush in to improve the technology options for RIAs. We believe the increased number of WealthTECH companies and their tools has positively affected deal volume for RIAs, as advisors are now able to plug and play with different platforms rather than being tied to the infrastructure of one institution.
Exhibit 17:
Dramatic Ascension of FinTech Fuels Evolution of WealthTECH
FinTech Sectors
Currency WealthTECH Trading Exchange &
Transfer
Lending Payments Crowdfunding
WealthTECH Sectors
Operations & Modeling & CRM Compliance Execution
Decision Marketing Accounting
Support
& Reporting
Source: ECHELON Partners
26
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Exhibit 18:
2020 was a pivotal year for WealthTECH as advisors were forced to embrace technology due to the pandemic. Tools such as videoconferencing, virtual onboarding, and CRM were essential for advisors to maintain and grow their AUM during a time when traditional workflows were disrupted. ECHELON expects significant AUM transition from financial advisors that were not able to embrace the virtual environment and subsequently left clients feeling neglected. Advisors that were able to be proactive and manage client expectations using technology during moments of heightened market volatility will benefit over the coming year as clients reflect on their experience throughout 2020 and plan for 2021.
In terms of deal volume, Exhibit 18 reflects robust demand for WealthTECH companies as 2020 proved to be a record year. There were 48 announced deals, topping 2019's previous record by 54.8% and indicating a compound annual growth rate of 35% since 2014.
North American WealthTECH M&A Hits Record High in 2020
Annual WealthTECH Transactions
WealthTECH M&A activity increases for the sixth straight
year.
8
48
31 27
17
19
22
2014
2015
2016
2017
Sources: Company Reports and ECHELON Partners Analysis
2018
2019
2020
WealthTECH M&A will further increase from its current levels in terms of deal volume and prices as both push and pull demand factors affect the marketplace. End clients and advisors will act as the push factor demanding digitized but customized experiences, while asset managers, FinTechs, and other service providers to the wealth management community will be the pull factor as they develop products and invest in related technologies to improve engagement and overall flows from advisors and the end client. Effective WealthTECH tools drive advisor and client engagement, benefiting all members of the wealth management ecosystem.
27
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Top WealthTECH Deals & Dealmakers of 2020
Exhibit 19 displays the top WealthTECH deals of 2020. The most active subsector of the WealthTECH M&A market in 2020 was Modeling and Execution, which includes companies that help financial advisors build portfolios for clients and service them in a more efficient manner. The growing investment and deal activity in this subsector reflected an expectation of growing demand from end clients and financial advisors for investment product enhancements such as roboadvisory portfolio management (Empower Retirement's acquisition of Personal Capital), direct indexing (Goldman Sachs' acquisition of Folio Financial, Schwab's acquisition of Motif Investing, CI Financial's acquisition of WealthBar, Morgan Stanley's acquisition of Parametric, BlackRock's acquisition of Aperio, and JP Morgan's acquisition of 55ip), and alternative investment online marketplaces (iCapital's acquisition of competitor Artivest and carve-out of Wells Fargo Alternative Investments Feeder Fund Platform).
Exhibit 19:
Top 2020 WealthTECH Deals
Seller
Seller Categorization
Buyer
Sustainalytics
Reporting & Accounting Morningstar
AdvisorEngine
Modeling & Execution Franklin Templeton
Motif Investing
Modeling & Execution Charles Schwab
Artivest
Modeling & Execution iCapital
Folio Financial
Modeling & Execution Goldman Sachs
WealthBar
Modeling & Execution
Wells Fargo Alternative Investments Feeder Fund Platform
Modeling & Execution
Personal Capital
Modeling & Execution
CI Financial iCapital Empower Retirement
Parametric (Eaton Vance)
Modeling & Execution Morgan Stanley
YCharts
Decision Support
LLR Partners
OneDigital
Other
Onex
Blaze Portfolios
Modeling & Execution LPL Financial
Aperio
Modeling & Execution BlackRock
55ip
Modeling & Execution JP Morgan
Flourish
Reporting & Accounting
Sources: Company Reports, SEC IARD Website, ECHELON Partners Analysis
MassMutual
Date 4/21/2020
5/6/2020 5/7/2020 5/13/2020 5/14/2020 5/21/2020 6/18/2020 6/30/2020 10/8/2020 10/9/2020 10/9/2020 11/23/2020 11/24/2020 12/3/2020 12/14/2020
28
Exhibit 20:
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Exhibit 20 looks at M&A deal activity over the past year in the WealthTECH sector. Firms providing modeling and execution services continue to be the most common acquisition targets, accounting for 34.5% of targets for all deals closed in the past 12 months. While this remains the largest unique category, it is significantly lower than the category's total in 2019 when these firms were responsible for approximately 50% of all WealthTECH M&A targets.
WealthTECH Transaction Breakdown 2020
CRM, 1.8%
Marketing, 1.8%
Decision Support, 3.6%
Operations & Compliance, 10.9%
Modeling & Execution, 34.5%
Accounting & Reporting, 16.4%
Other, 30.9%
Sources: Financial Planning Tech Survey, Company Reports, and ECHELON Partners Analysis
The majority of deals in the Modeling and Execution category involved large asset managers purchasing direct indexing firms. These companies allow for greater customization and improved tax efficiency for end investors through direct ownership of securities in managed portfolios (both passive and active).
29
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Direct Indexing: The Next Frontier of Asset Management
The evolution of investment products for financial advisors has evolved from individual securities to mutual funds to ETFs, and the next iteration is direct indexing. Labeled as the "ETF-disruptor" and "next wave in asset management," direct indexing blends the best of all product offerings together, providing the direct ownership benefits of individual stocks and trading and rebalancing of institutionalized portfolio management.
Acquired May 2020
Acquired May 2020
What is Direct Indexing? Simply stated, it is a process that
seeks to replicate an index or strategy by purchasing the
individual securities rather than shares of the index or strategy itself. Individual ownership provides benefits such as
Acquired
Acquired
tax-loss harvesting and increased customization of
holdings (accommodating faith-based investors, ESG
considerations, thematic tilts), and increases transparency of May 2020
November 2020
holdings for investors. Up until this year, direct indexing was
largely reserved for wealthy clients and institutional investors,
but given transactions announced in 2020 (Charles Schwab �
Motif, CI Financial � WealthBar, Goldman Sachs � Folio, Morgan Stanley � Parametric, Blackrock � Aperio, and JP
Acquired
Acquired
Morgan � 55ip), partnerships (Fidelity and start-up Ethic and
Riskalyze and Rowboat Advisors are examples), as well as a
zero-commission trading environment and fractional shares, November 2020 December 2020
we expect to see direct indexing rolled out to the masses. Financial advisors should be prepared
to offer this innovative solution to clients and communicate the value proposition to clients and
their portfolios. Exhibit 21 displays the direct indexing market landscape that includes TAMPs,
WealthTECH providers, and asset managers. Some are specialized direct indexing providers
focused on specific thematic trends (e.g., ESG focused), while others have broad offerings that
span various active and passive investment philosophies.
Exhibit 21:
Direct Indexing Market Landscape
Core Offering
Direct Indexing As A
Solution
Non-Core Offering
Narrow
Direct Indexing Capability
Broad
30
Section 4: Wealth Management Breakaway Activity
31
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Breakaway Overview
The "RIA breakaway" is a relatively underappreciated phenomenon that increased in prevalence over the past decade. While RIAs are becoming a relatively more attractive destination for all types of advisors to migrate to, some RIAs are not doing a very good job of aligning the contributions of their most valuable employees with the rewards provided. This is causing an increasing number of partner-worthy professionals to leave the RIAs they helped grow in order to join a "Newco" or other established RIA that shares more equity, profits, and governance with them than their former employer did. Given the "slow to change" profile of some RIA owners, we expect RIA breakaways to continue increasing and to become a larger part of overall breakaway activity in the foreseeable future.
Breakaway activity declined substantially this year from the record-setting 2019 as economic uncertainty caused advisors to be wary of changing platforms. As Exhibit 22 shows, total breakaway activity declined by nearly 20% this year and sits at just above the level the industry saw in 2018. Interestingly, while overall breakaway activity slowed substantially from its record 2019 pace, the number of $BN+ breakaways skyrocketed to 33 throughout the course of the year, once again demonstrating the effects that the COVID-19 crisis had on smaller advisors but not necessarily on impact larger, more established teams. These larger advisors remained interested in seeking the platforms that provide them with the best financial opportunity, despite the financial market volatility and economic uncertainty.
Exhibit 22:
Reported Breakaway Activity Experiences a Sharp Decline Sub-$1BN Breakaways $BN+ Breakaways
YOY % Change
Number of Breakaways YOY % Change
2020 saw declining overall
breakaway activity yet record $BN+ transitions.
670
535
356
392
465
430
423 26% 25%
19%
10%
-2% -8%
2013 2014 2015 2016 2017 2018 2019
Sources: SEC Database, Company Reports, Investment News, and ECHELON Partners Analysis
537
-20% 2020
It is important to note that reported breakaway activity, as outlined in the graph, is an estimated one-third to one-fourth of true volume, with a majority of breakaways
not being reported. Please see the note below Exhibit 1 for more details.
32
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Exhibit 23 outlines the top breakaways from the past two years. Sixty-four percent of these occurred in 2020, further highlighting the trend that breakaway activity among large teams accelerated this year. Still, 2020's largest breakaway that saw a $9.0 BN team leave JP Morgan Chase for UBS, was not able to top 2019's largest breakaway, which involved $9.2 BN in AUM.
Exhibit 23:
Breakaways with AUM Over $1 BN in 2019 and 2020
Team Leaving
Team Joining
Firm Type
First Republic JP Morgan Chase & Co. First Republic
Evoke Wealth UBS Financial Services IEQ Capital
RIA Wirehouse Asset Manager
UBS Financial Services Inc.
RBC Wealth Management
Regional Wirehouse
RBC Wealth Management UBS Financial Services
Wirehouse
Wells Fargo Advisors
Ameriprise
Independent Broker Dealer
Goldman Sachs Goldman Sachs Morgan Stanley UBS Financial Services Merrill Lynch Goldman Sachs Wells Fargo Advisors Goldman Sachs
UBS Financial Services UBS Financial Services Dynasty Financial Partners NewEdge Morgan Stanley First Republic Bank Mayflower Advisors UBS Financial Services Inc.
Wirehouse Wirehouse Other Wirehouse Wirehouse Bank RIA Wirehouse
JFC Financial Services
LPL Financial
Independent Broker Dealer
Securities America, Inc.
LPL Financial
Independent Broker Dealer
Brown Advisory Securities, LLC
William Blair
Bank
UBS Financial Services Inc. Merrill Lynch Merrill Lynch
Morgan Stanley First Republic Bank Nspire Wealth
Wirehouse Bank RIA
UBS Financial Services Inc.
Stifel, Nicolaus & Company, Regional
Incorporated
Wirehouse
Morgan Stanley
Gladstone Wealth Partners RIA
Morgan Stanley
LPL Financial
Independent Broker Dealer
United Capital
Mariner Wealth Advisors RIA
UBS Financial Services
Venture Visionary Partners Wirehouse
Sources: SEC Database, Company Reports, Investment News, and ECHELON Partners Analysis
Breakaway AUM ($MM)
9,200 9,000 8,000
Date
6/3/2019 12/20/2020
6/3/2019
7,500 12/4/2019
7,500 12/4/2019
7,100 9/23/2020
6,600 6,000 6,000 4,800 4,400 4,000 3,750 3,000
4/3/2019 2/21/2020 4/26/2019 12/14/2020 9/18/2020 2/21/2020 12/2/2020 8/25/2020
3,000 5/4/2020
3,000 4/30/2020
3,000 2/28/2019
2,860 2,700 2,500
5/24/2019 8/11/2020
3/2/2020
2,300 4/23/2019
2,000 11/16/2020
2,000 11/12/2020
2,000 11/4/2020 1,800 11/12/2020
33
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Exhibit 24 showcases the firms that gained the most AUM from breakaway activity in 2020. LPL Financial saw over $32.0 BN from 80 advisory teams join its platform, the largest of any firm by both metrics, indicating that the company added many new teams with relatively low AUM. UBS and Raymond James Financial Services both maintained their place in the list of firms that gained the most via breakaways, adding $21.8 BN and $14.4 BN, respectively. UBS's average AUM per team joined sat at just under $2.2 BN, the highest average for any firm that saw at least two teams join its platform.
Exhibit 24:
Largest AUM Gained by the Firm Team Joins ($MM)
LPL Financial
32,044
UBS Financial Services
21,870
Raymond James Financial Services
14,428
Morgan Stanley
13,457
Ameriprise Financial
12,224
Sources: InvestmentNews, OnWallStreet.com, and ECHELON Partners
Conversely, Exhibit 25 outlines the top five firms that saw the greatest AUM losses due to breakaway activity. Troubles continued for Wells Fargo Clearing Services as it saw the largest drawdown on AUM for the second year in a row, losing almost $33 MM to teams breaking away. Morgan Stanley and Merrill Lynch also continue to hold their positions as the firms with the second-and third-most breakaway AUM losses. Departure from these firms demonstrates the continued trend of advisors leaving large wirehouses for fee-only independent RIAs or hybrid firms. UBS Financial Services experienced high turnover in 2020, losing $14 MM in AUM from departing advisors while also gaining $22 MM from joining ones � a net gain of $6 MM in AUM.
Exhibit 25:
Largest AUM Lost by the Firm Team Departs ($MM)
Wells Fargo Clearing Services, LLC
32,645
Merrill Lynch
25,577
Morgan Stanley
21,318
Goldman Sachs
14,700
UBS Financial Services
14,127
Sources: InvestmentNews, OnWallStreet.com, and ECHELON Partners
34
ECHELON PARTNERS RIA M&A DEAL REPORT TM
2021 Outlook
Given the continued momentum and fundamental motivators that supported dealmaking throughout 2020, we strongly believe that 2021 has the potential to be another record year for M&A activity in the wealth management industry.
We believe there are five primary drivers of M&A that will lead to increased activity in 2021 and beyond:
I. Demographic Tipping Point: M&A will continue to play an accelerated role in solving for the wealth management industry's widespread succession need. With many founders approaching retirement and seeking liquidity events � and with valuations still strong � we anticipate that the number of sellers will continue to increase in 2021.
II. Increased Interest from Well-Capitalized Buyers: Aggregators, consolidators, emerging independent RIA leaders, large financial services firms, and private equity capital have fueled the continued increase in deal volume and AUM transacted. We expect the market will continue to see strong interest from this increasingly competitive group of buyers; in addition, we anticipate that new players (both in the U.S. and from abroad) will enter the market and increase dealmaking capacity.
III. Increased Availability of Financing: A general lack of deal financing plagued the wealth management industry for decades, as traditional lenders overlooked the industry's attractive recurring revenue streams. Now, however, more savvy, cash-flow-appreciating lenders have entered the market, as we have noted, and have helped fuel the ability of smaller, less experienced buyers to execute transactions. This increased access to financing has also allowed RIAs in particular, to grow, recognize operational efficiencies, attract talent, and realize other benefits from increased scale. Participants range from local regional banks to, more recently, platforms dedicated to helping RIAs grow via debt capital and other sources.
IV. Convergence of Wealth, Asset Management, Retirement, and Technology: As wealth managers, asset managers, and retirement providers reinvent their business models and offerings, M&A will play a major role in creating scale, as well as operational and economic efficiencies. In addition, as more of these firms look to rely on AI-based and algorithmic approaches to money management, business development, and client service, they will be forced to build or buy innovative technology platforms. We believe that the acquisition of leading technology platforms will accelerate in 2021 as wealth managers, asset managers, and retirement providers look to quickly differentiate in increasingly competitive markets.
V. Market Cycle Timing: Typically, it takes at least one year to consummate a deal, so trying to time the market with the sale of your company can prove extremely difficult. Still, advisors will attempt to factor in market cycles in timing their exit strategies. With the U.S. economy in the eleventh year of an expansion, the longest on record, we expect to see continued interest in the M&A process and upward pressure on deal activity.
35
ECHELON PARTNERS RIA M&A DEAL REPORT TM
Frequently Used Terms
Bank � A financial institution licensed, and typically insured by the federal government, to receive deposits and make loans. A bank may also provide financial services, such as wealth management, currency exchange, and safe deposit boxes.
Consolidator � A firm that consolidates several business units of several different companies into a larger organization, with the intent of improving operational efficiency by reducing redundant personnel and processes.
FinTech � An emerging sector of technology-enabled financial services. The term has expanded to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment, and cryptocurrencies.
Independent Broker Dealer (IBD) � A broker dealer firm that offers its services to financial advisors operating as independent contractors. The IBD business model has a mix of commission-based products and fee-based advice with insurance services.
Investment Management � A service that invests its clients' pooled funds into securities that match declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves.
Private Equity (PE) � A source of investment capital from high-net-worth individuals and institutions for the purpose of investing and acquiring equity ownership in companies.
Registered Investment Advisor (RIA) � An advisor or firm engaged in the investment advisory business and registered either with the Securities and Exchange Commission (SEC) or state securities authorities.
Strategic Buyer � A type of buyer in an acquisition that has a specific reason for wanting to purchase the company. Strategic buyers look for companies that will create a synergy with their existing businesses. Also known as synergistic buyers.
Wealth Management � A high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning, and legal or estate planning for a fee.
WealthTECH � A sector of the FinTech industry that captures the universe of technology-driven companies that cater to the wealth and investment management industries. Wirehouse/Broker Dealer � A firm in the business of buying and selling securities, operating as both a broker and a dealer, depending on the transaction.
36
About ECHELON Partners:
ECHELON Partners is a Los Angeles-based investment bank and consulting firm focused exclusively on the wealth and investment management industries. ECHELON was formed to:
Address the needs of an underserved subset of the
financial services industry -- investment product developers, distributors, and technology providers
Provide objective, unbiased advice void of conflicts
emblematic of larger institutions
Help entrepreneurs working at companies of all sizes
navigate the numerous complex decisions that come with attaining growth and liquidity
Our Expertise
ECHELON's service offerings fall into three categories:
Investment Banking Management Consulting Valuations
ECHELON's comprehensive range of services help its clients make the tough decisions relating to acquisitions, sales/divestitures, investments, mergers, valuation, mergers and acquisitions, strategy, new ventures, management buyouts, capital raising, equity sharing, and succession planning.
ECHELON's business is making companies more valuable through its visionary advice and execution excellence. Accordingly, ECHELON measures its success by the enterprise value it creates for its clients. With an unparalleled quantity and quality of investment banking experience in the wealth and investment management industries, no other investment bank can match the caliber of advice or financial results delivered by the professionals of ECHELON Partners.
Our History
ECHELON Partners was founded in 2001 by Dan Seivert, the firm's current CEO and Managing Partner.
Over the past 20 years, the firm's principals have completed more M&A advisory assignments, valuations, and strategic consulting engagements for its three target industries than any other investment bank. In that time, hundreds of executive teams and boards have chosen ECHELON Partners to help them envision, initiate, and execute a diversity of complex business strategies and transactions.
1500 Rosecrans Avenue, Suite 416 Manhattan Beach, CA 90266 888.560.9027 | www.ECHELON-partners.com
Follow us on Twitter: @echelon_group
How ECHELON Can Help
Provide Transaction Assistance (Mergers, Sales, Acquisitions, Capital Raising): Valuation and transactions go hand-in-hand, whether buying, selling, raising capital, divesting, investing, and/or restructuring. The professionals at ECHELON have extensive experience handling these transactions and matching the appropriate deal processes to meet the many objectives of the stakeholders involved.
Conduct a Valuation: Managers need to know firm value and, more importantly, the key drivers of value. ECHELON has emerged as the leader in delivering high-quality valuation reports that cut through irrelevant information and tell managers exactly what drives value and how their firm is performing.
Provide Continuity & Succession Planning: With its industryspecific experience and focus, ECHELON Partners equips its clients with continuity plans and succession plans designed to mitigate risk and plan for the future. ECHELON develops continuity plans for equity owners who want to put in place a short-term plan for a previously selected successor to take over their firm in the event of a catastrophe, such as death or disability. ECHELON's more involved succession planning process helps equity owners develop a formal plan for their retirement or known departure from the firm, whether they want to pursue an internal sale to colleagues or family or want to take steps to prepare the firm for an external sale.
Advise on Equity Compensation Structure: As firms grow and evolve, it is common for a wedge to develop between those who create value and those who reap the benefits (through equity ownership). This necessitates the development of equity-sharing strategies that are fair, that can foster employee retention, and at the same time minimize tax consequences and complexity. ECHELON is experienced in developing these structures for a host of unique situations.
Advising on Equity Recycling and Management: Managers need a method of internal succession whereby a senior partner sells a portion of his or her equity to either one or more junior partners currently with the firm or incoming partners not yet with the firm.
Advise on the Buyout of an Equity Partner: A problem that arises for most firms that remain private occurs when one or more of the founders need liquidity or need to be bought out. These situations require thoughtful valuation and structuring that correspond to the particular situation.
ECHELON by the Numbers
400+ investment banking advisory assignments
20+ years of experience valuing financial services companies
2,000+ valuations conducted
#1 in conducting valuations for wealth managers with $1 BN+ in AUM
400 investment opportunities vetted and valued
2,000+ acquisition targets evaluated
25 published reports focused on wealth manager M&A, management consulting, and valuation
ECHELON's Leadership
DAN SEIVERT | CEO AND MANAGING PARTNER
dseivert@echelonpartners.com
Dan Seivert is the CEO and founder of ECHELON Partners. Prior to starting ECHELON Partners, Mr. Seivert was one of the initial principals of Lovell Minnick Partners, where he helped invest over $100 MM in venture capital across 15 companies. Before his involvement in private equity, Mr. Seivert was a buy-side analyst at The Capital Group (American Funds) where he valued firms in the asset management and securities brokerage industries. In his various roles, Mr. Seivert has conducted detailed valuations on over 500 companies, evaluated more than 2,000 acquisition targets, and authored 25 reports dealing with the wealth and investment management industries. Mr. Seivert has an Advanced Bachelor's degree in Economics from Occidental College and a Master of Business Administration from UCLA's Anderson School of Management.
CAROLYN ARMITAGE, CFP�, CIMA� | MANAGING DIRECTOR
carmitage@echelonpartners.com
Carolyn Armitage is a Managing Director at ECHELON Partners and is a serial enterprise builder of asset and wealth management firms. Ms. Armitage improves the positioning, profitability, enterprise value, and team dynamics for RIAs, Broker/Dealers, and Hybrid RIAs. Ms. Armitage's experience includes roles an independent Financial Advisor and producing Branch Manager, the head of multiple advisory services teams of small and large independent firms (HD Vest, ING Advisors Network holding company (now Voya & Cetera), and more). She also led the Large Enterprise Business Management Consulting team for LPL Financial. In addition to holding numerous FINRA licenses, Ms. Armitage holds the CFP� & CIMA� designations. She has a BS in Business Administration from the University of Minnesota and a Masters in Management from The American College.
MIKE WUNDERLI | MANAGING DIRECTOR
Mike Wunderli is a Managing Director at ECHELON Partners and is integrally involved in all
aspects of the firm's activities. Prior to joining ECHELON, Mr. Wunderli founded Connect
Capital Group (CCG) where he advised private, middle-market companies on pre-transaction
planning, growth financing options and the development and execution of exit strategies.
Before founding CCG, Mr. Wunderli spent 12 years at Lehman Brothers and UBS as a Senior
Vice President in the Private Wealth Management (PWM) division. During his time at
Lehman Brothers and UBS, Mr. Wunderli executed over $2 BN in investment-banking and
private-equity transactions for his clients and managed over $400 MM for high-net-worth
mwunderli@echelon- investors and their families. Mr. Wunderli received his BA from Brigham Young University
partners.com
and an MBA from The Wharton School at the University of Pennsylvania.
MARK BRUNO | MANAGING DIRECTOR
mbruno@echelonpartners.com
Mark Bruno is a Managing Director at ECHELON Partners. Prior to joining ECHELON, Mr. Bruno was the Managing Director and Associate Publisher at InvestmentNews, where he was responsible for overseeing a wide range of businesses, including IN's research, content strategy, digital, custom publishing and sales groups. Mr. Bruno was with InvestmentNews for 12 years and helped establish the company as the leading B2B media brand in the wealth management industry. He played an integral role in the sale of InvestmentNews from Crain Communication to Bonhill Plc in 2018. Mr. Bruno is an award-winning journalist, author and researcher who has written and edited for a number of financial publications over the past two decades, including InvestmentNews, Financial Week, Pensions & Investments and U.S. Banker.
Sample Transactions & Advisory Assignments Executed by the ECHELON Team
has agreed to a merger with
ECHELON provided the Management of Independence
Advisors with: Valuation and Sell-Side
Advisory Services
has completed the acquisition of
ECHELON provided the Management of Wealthstream
Advisors, Inc. with: Valuation and Buy-Side Advisory
Services
has been acquired by
a portfolio company of
ECHELON provided the Management of Goss Advisors with: M&A Advisory Services
ECHELON provided the Management of Rowling &
Associates with:
Valuation and Succession Transaction Advisory Services
has agreed to a merger with
to form
ECHELON provided the Management of the firms with: Merger and Financial Advisory
Services
has completed the acquisition of
ECHELON provided the Management of Sullivan & Serwitz with:
Valuation and Sell-Side Advisory Services
has completed the acquisition of
ECHELON provided the Management of OBS Financial with: Valuation and
Sell-Side Advisory Services
ECHELON provided the Management
Concentric Wealth Management, LLC with: Buy-Side Advisory Services
ECHELON provided the Management
of Blue Oak Capital, LLC with:
Valuation and Financial Advisory Services
has agreed to a merger with
ECHELON provided the Management of FiComm Partners and Nexus Strategy, LLC with: M&A and Financial Advisory Services
ECHELON provided the Management
of Halite Partners with:
M&A and Financial Advisory
Services
has agreed to a transaction with
ECHELON provided the Management of Lexington Capital Management Inc.
with: M&A and Financial Advisory Services
ECHELON provided the Management
of Massey Quick Simon & Co. with:
Valuation and Financial Advisory
Services
ECHELON provided the Management
of Oakworth Capital Bank with:
M&A Advisory Services
ECHELON provided the Management
of Retirement Income Solutions with:
Valuation and Financial Advisory Services
ECHELON provided the Management
of Rowling & Associates with:
Valuation and Financial Advisory Services
ECHELON provided the Management
of SignatureFD with:
Valuation and M&A Advisory Services
ECHELON provided the Management
of The Gensler Group with:
Valuation and Financial Advisory Services
has completed the acquisition of
Horizon Planning, Inc.
ECHELON provided the Management
of Wealthstream Advisors, Inc. with:
Valuation and Buy-Side Advisory Services
has completed the acquisition of
ECHELON provided the Management of Merit Financial Group with: Valuation and Buy-Side Advisory Services
ECHELON provided the Management
of Centennial Securities with:
Valuation and Financial Advisory Services
ECHELON provided the Management
of Bridgeworth, LLC with:
Valuation and Financial Advisory Services
Sample Transactions & Advisory Assignments Executed by the ECHELON Team
Research Methodology & Data Sources:
The ECHELON Partners RIA M&A Deal Report is an amalgamation of all mergers, majority equity sales/purchases, acquisitions, shareholder spinoffs, capital infusions, consolidations, and restructurings ("deals") of firms that are SEC Registered Investment Advisors ("RIA"). The report is meant to provide contextual analysis and commentary to financial advisors pertaining to the deals occurring within the wealth & investment management industries. The deals tracked and identified in the Deal Report include any transaction involving an RIA with over $100 MM assets under management, which have also been reported by a recent data source (e.g., SEC IARD website, a press release, ECHELON Partners Deal Tracker, industry publications). This methodology aims to maintain consistency of data over time and ensure the utmost accuracy in the information represented herein. Additionally, the report includes financial advisors who terminate relationships with other financial service institutions in order to join RIAs. As with the other transactions reported in the Deal Report, the identified breakaway advisor transitions are transitioning over $100 MM assets under management to a new financial services firm. The reason for this being that transitions of this magnitude are more often than not accompanied with compensation for the transition of assets. The contents of this report may not be comprehensive or up-to-date and ECHELON Partners will not be responsible for updating any information contained within this Deal Report. The ECHELON RIA M&A Deal Report: An Executive's Guide to M&A in the Wealth Management, Breakaway, and Investment Management Industries. � Copyright 2021 ECHELON Partners. All rights reserved. No part of this publication may be reproduced or retransmitted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording, or any information storage retrieval system, without the prior written permission of ECHELON. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorney's fees. The information contained in this report has been obtained from sources believed to be reliable, and its accuracy and completeness is not guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein. ECHELON can accept no responsibility for such information or for loss or damage caused by any use thereof. The views and other information provided are subject to change without notice. This report is issued without regard to the specific investment objectives, financial situation or particular needs of any specific recipient and is not to be construed as a solicitation or any offer to buy or sell any securities or related financial instruments.
Deals & Dealmakers Webcast Series 2020
Deals & Dealmakers Webcast Series Episodes
Keynote Debate: The Changing Formula of
Success in M&A
How to Maximize the Value of Your Firm
The Secrets of Succession Planning
The Competitive Dynamics of RIA M&A
Culture & Alignment: The People Side of Dealmaking
Advanced Deal Structuring and Financing
Build or Buy � Or Both? Organic and Inorganic
Growth Strategies
Capstone Debate: The Insiders' Views on Deal Structuring, Negotiations, and Legal Documents
Click here to view replays of any episode of this eight-part series covering industry trends, dealmaking techniques, and advice for increasing the value of your firm
Behind the Deal Podcast
Behind the Deal is the only podcast that provides an inside look at merger and acquisition activity
in the wealth management industry.
Hosted by ECHELON Partners' Mark Bruno, Behind the Deal features the real stories of the
top deal-makers in the industry. They offer insights into their actual M&A experiences and provide advice, guidance and counsel for wealth
managers looking to execute a successful acquisition, sale, or merger.
Click here to watch ECHELON's podcast series on best practices for mergers and acquisitions � straight
from the leading and most influential dealmakers in the wealth
management industry
Download & Subscribe to Behind the Deal
Apple Podcasts
Spotify
INVESTMENT BANKERS MANAGEMENT CONSULTANTS VALUATION EXPERTS to the Wealth and Investment Management Industries
Mike Wunderli
Managing Director mwunderli@echelon-partners.com
888.560.9027 Ext. 202
Barnaby Audsley
Vice President baudsley@echelon-partners.com
888.560.9027 Ext. 404
Daniel Seivert
Managing Partner & CEO dseivert@echelon-group.com
888.560.9027 Ext. 101
Carolyn Armitage, CFP�, CIMA�
Managing Director carmitage@echelon-partners.com
888.560.9027 Ext. 303
Andrea Polizzi
Vice President apolizzi@echelon-partners.com
888.560.9027 Ext. 404
Mark Bruno
Managing Director mbruno@echelon-partners.com
516.465.3846
Sam Sphire
Analyst ssphire@echelon-partners.com
888.560.9027 Ext. 404
ECHELON Partners 1500 Rosecrans Ave., Suite 416 Manhattan Beach, CA 90266
888 560 9027 www.echelon-partners.com
Member: FINRA/SIPC