Over the quarter, RIA firms displayed an appetite for acquiring other RIAs, with these kinds of deals accounting for 54 per cent of all transactions closed in Q1. For the whole of 2012, RIAs were the buyer in 20 per cent of deals, suggesting that, if the current trend continues, 2013 could be a bumper year for tie-ups between these firms.

The second most active category of buyers were strategic acquiring firms, completing 38 per cent of deals, while regional and national banks completed no deals.  

“Though it’s still very early in the year, this quarter’s strong deal flow among RIAs is an indication that advisors are using M&A to increase the scale and footprint of their businesses,” said Jon Beatty, senior vice president, sales and relationship management, Schwab Advisor Services.

However, Beatty noted that the overall deal size declined in the quarter as no “mega deals” took place. By contrast, the first quarter of last year saw 17 deals take place, accounting for some $24 billion in AuM.

Early findings from Schwab’s 2013 RIA Benchmarking Study show that around 27 per cent of RIAs surveyed (a total of 1,025 firms) are actively seeking to buy another firm. For RIAs with over $1 billion in assets under management, this figure rises to a third.

“Given RIAs’ enthusiasm for mergers and acquisitions, coupled with the strong flows recorded to date, we believe there will be an increase in appetite for deals among RIAs moving forward if the economy improves and capital and liquidity becomes more accessible,” said Beatty.