Pershing Real Deals Report Sees Bright Spots in RIA Mergers and Acquisitions Activity

April 8, 2013

Increase in RIA to RIA Transactions Buoy the M&A Space and Point to Growing Confidence in the Market

JERSEY CITY, N.J. - Pershing Advisor Solutions LLC, a BNY Mellon company, today announced the release of a report analyzing deal-making activity among registered investment advisors (RIAs). Real Deals Trend Report: The Powerful Potential of the RIA to RIA Deal, found that despite unfavorable deal-making conditions, 37 percent of all deals in 2012 consisted of an RIA entering into a "one-off" transaction with another RIA or an RIA making a series of acquisitions. These types of deals were typically driven by a desire to gain one of four strategic objectives: achieve economies of scale, access a new geographic or segment market, bring in new skills and experience, or enable a succession in ownership.

"The biggest trend in M&A is same-model marriages— RIAs rolling into other RIAs instead of into consolidators," said Mark Tibergien, chief executive officer of Pershing Advisor Solutions. "Three big reasons why this will be a boon— the economics of these deals, the economies of scale that they create and the doors these opportunities open to all."

The Real Deals Trend Report offers strategic advice and key considerations to achieve synergies and create competitive advantages through RIA to RIA transactions, including:

  • Realizing the benefits of scale—Joining forces should provide opportunities to generate economies of scale. Some of the key elements to consider are the management of the human capital of the combined entity, implementing "best of" operational processes and technology to drive growth and profitability and the development of a cohesive marketing strategy to identify cross-sell opportunities.
  • Gaining access to a new market—A merger or acquisition can accelerate market penetration by expanding a firm’s geographic or industry footprint. Owners should consider the barriers to entry, setup costs, as well as operational, marketing and human capabilities that may enable growth organically. If a merger or acquisition is the best way to access a new market, advisors should quantify the financial benefit of expansion for shareholders and define a clear integration plan.
  • Acquiring new skills or capabilities—Prior to considering a deal, advisors should identify current capability gaps and calculate how the cost of hiring or training and developing desired capabilities internally would impact profitability and deliver new skills and capabilities. The benefit of a merger or acquisition should be assessed by comparing these costs and quantifying the value of increased share of wallet per client, expanded offerings and greater appeal with prospects.
  • Effect a succession in ownership—Advisory firm leaders should consider all viable alternatives before pursuing a succession-focused deal. Internal succession options should be assessed, such as recruiting a future successor into the firm or selling the firm outright. To move forward with a succession-oriented transaction, owners should identify what they want in a successor, reach an agreement regarding the succession plan with the other party and develop strategies for the exiting owners to continue to enhance the firm’s performance and value.

"The rewards linked to transacting with another RIA are compelling," Tibergien added. "If done right, advisory firms can become more competitive, enhance profitability, accelerate growth and increase flexibility related to ownership succession. However, owners must be meticulous in their planning in order for this type of deal to yield rewards. In general, the greater the upfront investment in deliberate planning, the greater return you deliver to shareholders."

The Real Deals Trend Report: The Powerful Potential of the RIA to RIA Deal, produced in conjunction with FA Insight, an independent research and consulting firm, contains insights gleaned from a proprietary database of all publicly known major deals announced since 2000. The report is also based on interviews conducted with transaction participants, including buyers and sellers of firms and industry investment bankers. The report is the fifth in a series of reports published by Pershing since 2006.

About Pershing Advisor Solutions

Pershing Advisor Solutions LLC (member FINRA/SIPC) is an affiliate of Pershing LLC and a leading provider of financial business solutions to independent, fee-based registered investment advisors and dually-registered advisors working in conjunction with many of Pershing LLC's introducing broker-dealer customers.

About BNY Mellon's Pershing

BNY Mellon’s Pershing and its affiliates provide advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers with a broad suite of global financial business solutions. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody, investment and retirement solutions, technology, enterprise data management, trading services, prime brokerage and business consulting. Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. With a network of 23 offices worldwide, Pershing provides business-to-business solutions to clients representing more than 7 million investor accounts globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. Additional information is available on, or follow us on Twitter @Pershing.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Dec. 31, 2017, BNY Mellon had $33.3 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on Follow us on Twitter @BNYMellon or visit our newsroom at for the latest company news.