CIOs and Bow Ties

CIOs and Bow Ties

Redefining Advisor Independence in the Age of M&A

October 10, 2018

Of the roughly 12,500 SEC registered RIA firms in the United States, there are roughly 700 wealth management RIA firms with $1BB or more in AUM, representing almost double the numbers since 2013 (Investment Adviser Association, n.d.). The data leads us to two conclusions: the big are getting bigger, and they are also growing faster than the average RIA firm. With bigger firms bringing advanced technology and scale to the table, what does this mean for advisor independence?

Joining us in this discussion is David Canter, Executive Vice President and head of the RIA business segment at Fidelity Investments. David has been working with advisors for 25 years and has his finger on the pulse of the industry.

Listeners will learn:

[Frame 1:33] What the numbers look like across the RIA landscape? Hear the data that supports the conclusion that the big are getting bigger and growing faster, yet it’s still a business of small firms.

[Frame 2:59] Is 5BB the new 1bb benchmark? We’re starting to see a trend of truly regional RIA firms changing the complexion of this business.

[Frame 4:05] With the majority of RIAs managing under $100MM, is investment advisory still a business of small firms? The numbers say so, but scale is going to play a bigger part going forward. The competition is increasing in terms of technology, client service, and growth.

[Frame 5:33] What are the options for a smaller firms that wants to scale. According to Fidelity, there are 35,000 state and SEC-registered RIA firms in the United States. Is merger always the best option? If so, what are the different ways to partner with an acquirer?

[Frame 10:42] Regional differences in advisor consolidations. Smaller firms tend to be overlooked by some of the larger roll up or aggregator platforms, especially in the Southeast. Scale and talent are considerations, but finding the right cultural fit is especially important for smaller firms where the owner has his or her name on the door.

[Frame 14:37] How to resolve strategic issues in a merger or combination such as the surrender of control which can be a source of hesitation for many advisors.

[Frame 16:44] Being a peak earnings and being in a historic bull market at the current moment, it is absolutely a seller’s market. This is a good time to declare a major if you are thinking about selling or risk the prospect of diminishing firm value in the event of a future market downturn.

[Frame 19:48] Charting a course for your business, as opposed to timing the sale in the market, is the best way to ensure that your business has maximum terminal value.

[Frame 21:39] What the components of the solutions-based exercise should be that both partners should undergo when a prospective buyer is talking to a seller.

[Frame 25:42] Steps a smaller firm should take when they start going down the road to find the right partner. What resources should you put on the list?

Thank you for listening and we hope that you will subscribe to our podcast!


Fink, Greg. (2018, June 26th). How to Finance a Succession Plan. Advisor Perspectives. Retrieved from

Fink, Greg. (2018, June 25th). What RIAs Should Know When Selling Their Practices. Retrieved from

Hall, Chris. (2017, March 20). How the Advisor Age Gap Plays Out. Financial Advisor IQ. Retrieved from

Slater, Scott. Fidelity Wealth Management M&A Series: Insights on Sources of Capital and Independence. (2018 June). Fidelity Investments. Retrieved from

Investment Adviser Association and National Regulatory Services. (n.d.) 2018 Evolution Revolution Report: A Profile of the Investment Adviser Profession. Retrieved on October 6, 2018 from



This material is provided for informational purposely only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The views and strategies described may not be suitable for all investors. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. You cannot invest directly in an index. The opinions expressed are subject to change as subsequent conditions vary. Advisory services offered through ACG Wealth Inc.