Corporate Valuation, Investment Management

October 2, 2017

Recent Trends in Asset Management

This week, we’re sharing some recent media on trends in asset management, including the breakaway broker phenomenon, M&A activity, and the ongoing shift towards passive products.  Most industry observers foresee a continued flight from traditional wirehouses, an uptick in M&A activity spurred by increasing competitive pressures, and further fee pressure from passive products as we move towards a new equilibrium. 

Switching From Wirehouse to RIA – AUM And Revenue Requirements To Break Away

By Michael Kitces We wrote last month about advisors shifting from traditional wirehouses to independent RIAs, and this post by industry consultant Michael Kitces offers a deep dive into the economics of the switch from an advisor’s perspective.

RIAs Poised to Land Wirehouse Recruits

By Dan Jamieson Going independent doesn’t have to mean starting from scratch: wirehouse advisors are increasingly a recruiting channel for existing independent RIAs, according to this piece by industry observer Dan Jamieson.

Advisor Platform Comparison: Wirehouse vs RIA Aggregator vs Independent RIA

By Aaron HattenbachIn this guest post which appeared on Michael Kitces’ blog, industry insider Aaron Hattenbach offers perspective gleaned from his own experience on the relative merits of wirehouses, RIA aggregators, and fully independent RIAs, each of which he has worked at.

UBS is ‘Constantly Approached’ About Asset-Management Unit

By Patrick WintersThis article from Bloomberg underscores the potential for a new wave of deals in the asset management space: UBS Chief Financial Officer Kirt Gardner indicates that UBS is “constantly approached” regarding its asset management unit.

Path to Growth: Why RIA firms leverage M&A as a growth strategy

By Christopher V. Gunderson Increasing operational and compliance costs combined with downward fee pressure may be forcing consolidation in an industry where historically M&A activity has been sparse: according to a survey by InvestmentNews, 44% of RIAs plan to pursue M&A deals over the next five years.

Why Critics of Passive Investing Are Wrong

By: Kent Smetters Somewhere there’s equilibrium between active and passive asset management, and wherever that equilibrium may be, we are not there yet according to this WSJ piece by University of Pennsylvania Wharton School Professor Kent Smetters.

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What Today’s RIA M&A Headlines Tell Us About Valuation and Succession
What Today’s RIA M&A Headlines Tell Us About Valuation (and Succession)
RIA M&A headlines can create the impression that valuation is primarily about scale and headline multiples. In reality, today’s transaction environment reflects a more nuanced assessment of risk, growth, governance, and succession readiness.
Five Takeaways from Dimensional Fund Advisors’ Deals and Succession Conference
Five Takeaways from Dimensional Fund Advisors’ Deals and Succession Conference
Our team attended Dimensional’s Deals and Succession Conference in Charlotte this week, where industry leaders gathered to discuss the evolving M&A and succession landscape. While activity remains strong, this year’s conversations centered more on growth quality, equity structure, leadership depth, and cultural alignment than on deal volume alone.
Are IPOs in the Future for Wealth Management?
Are IPOs in the Future for Wealth Management?

Private Enthusiasm, Public Skepticism

There is a quiet irony developing in wealth management. Private equity firms continue to pay premium, sometimes nosebleed, prices for large RIA platforms. Acquisition funding continues to be available and consolidators keep consolidating. Even as private market exits have slowed and fundraising has become more difficult, sponsors remain willing to commit fresh capital to the sector. At the same time, public markets have shown only modest enthusiasm for investment management businesses.

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