In the past two years, 53% of registered investment advisers bought or considered buying another advisory firm, according to a new study from Pershing Advisor Solutions LLC.
The Jersey City, N.J., firm is a subsidiary of the Bank of New York Mellon Corp.
According to the study, “Real Deals 2008: Definitive Information on Mergers and Acquisitions for Advisors,” which was jointly released today with Moss Adams LLP of Seattle, the average number of mergers and acquisitions deals in the past two years rose 37%.
The top two reasons for a firm’s sale are advisers seeking a succession solution (37%) and achievement of synergies with another firm (25%).
The survey also showed that serial buyers are predominant. Previously, ad hoc bank purchases led the industry in sales.
Additionally, the number of transactions involving investment advisory firms jumped 37% over the past two years.
“Advisory firm owners must continually invest in their firms, build transferable value and position their firms as if a transaction were immediately pending. When the time is right to pursue a transaction, it must be done deliberately and with clear purpose,” Pershing said in a statement.
“The best-prepared firms are organized as businesses built to last and possess solid management, an orientation toward growth, depth of talent and sustained profitability,” the firm added.
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