echelon's ria m&a deal report...in 2017 and 2018. •$1 bn+ deals and breakaways continue...

30 36 14 26 29 30 28 28 38 31 47 27 33 31 47 45 35 41 46 48 43 44 49 52 49

• A Projected Record Year for Deal Making: Q3 2019’s

49 completed deals fell barely short of Q2’s record

numbers but still put 2019 on track to be another

record-breaking year with ~200 deals projected.

• Average Deal Size Increases: The third quarter saw

an increase in the number of deals involving over $1

BN in AUM and the average AUM transacted per

deal, reversing 1H19’s trend of declining deal size.

Private equity firms and banks are the buyers most

interested in larger platforms.

• RIAs Continue M&A Spree: After experiencing

declining market share of M&A transactions since

2016, RIAs are dominating low AUM deal volume so

far this year and are now the most active category.

2019 is projected to see 76 RIA-to-RIA transactions

representing a year-over-year increase of 58%.

• Breakaway Activity Regresses Towards the Mean:

After a slow start to the year and a record second

quarter, Q3 saw 138 breakaways, still higher than the

historical average, but closer to the levels observed

in 2017 and 2018.

• $1 BN+ Deals and Breakaways Continue Pace for

Banner Year: The number of $1 BN+ wealth

management M&A deals and breakaways is

projected to reach 66 this year, an increase of 38%,

compared to 2018.

ECHELON’s RIA M&A Deal ReportUS Wealth Management | Q3 2019

Key Trends and Highlights

™

Source: Company Reports, SEC IARD, ECHELON Partners Analysis

2013Q3 Q4

2014Q1 Q2

2014Q3 Q4

2015Q1 Q2

2015Q3 Q4

2016Q1 Q2

2016Q3 Q4

2017Q1 Q2

2017Q3 Q4

Trend Line (Logarithmic)

Exhibit 1. Q3 RIA M&A Deal Volume Remains High, Declines from the Previous Record Quarter

2018Q1 Q2

2018Q3 Q4

2019Q1 Q2 Q3

Executive OverviewWealth management M&A activity slowed slightly in Q3 of 2019,with 49 transactions recorded in ECHELON’s M&A Deal Trackerversus 52 in Q2. Activity fell slightly from the record-settingsecond quarter but remained strong overall despite continuedcapital markets uncertainty (volatility rose sharply in July andAugust with the VIX index increasing 93% from trough-to-peak)and the ongoing trade war between the U.S. and China.

2019 is on track to see 200 completed transactions, slightly lowerthan the number projected at the end of Q2, but still a record-breaking annual count. The continued activity in the wealthmanagement M&A market shows that structural forces(demographics and buyer interest) continue to driveconsolidation, despite market volatility. The M&A environmentcontinues to further benefit from depressed interest rates andwell-capitalized buyers are enjoying low borrowing costs,affording them plenty of capital to deploy.

The appetite of well-capitalized buyers (both strategic andfinancial) continues to dominate the RIA M&A leaderboard interms of AUM transacted. Charles Schwab Corp. (ticker “SCHW”)bought the brokerage and wealth-management operations ofUSAA for approximately $1.8 BN. The acquisition adds ~$90 BNAUM to the Schwab platform and signals continued focus onshifting resources to wealth management. According to ourrecords, Focus Financial, Hub International, and Mercer Advisorswere the most active buyers during the quarter. Private equitywas also active in the past three months as TA Associates and OakHill Capital Partners added $10 BN AUM plus wealth managementplatforms to their portfolios. Both represent a new trend inwealth management M&A: private equity to private equitytransactions.

3833 35

4349

Q32015

Q32016

Q32017

Q32018

Q32019

As Exhibit 1 shows, despite a small reduction in M&A activityin the third quarter, the RIA industry is still projected to reachits seventh straight record-setting year in 2019.

The 49 deals of Q3 2019 are on par with the levels seen inthe first quarter. Q3’s reduced activity distinguishes it fromthe preceding four quarters where deal volume increased atan average quarterly rate of 6.6%, though it’s important tonote that Q3’s levels were still on par or above the majorityof these periods. Activity is still primarily being driven bymid-size RIAs who are using inorganic growth strategies toexpand their businesses.

As Exhibits 2 & 3 show, the third quarter deal count hasgrown at a much slower rate when compared to the growthof the annual deal total since 2015. Third quarter deal totalsincreased at a compounded rate of only 6.6% while annualdeal totals grew at 12.5%. Despite the slowdown, Q3 2019still saw over 36% more deals than the quarterly average of36 transactions (2013-2019) and was 40% higher than the 3Qaverage of 35 transactions.

Exhibits 2 & 3. Wealth Management Transactions Year-Over-Year (Q3 and Yearly Data)

200

19

Increase in Deal Volume Relative to

2018

10.5%

Deals Projected in 2019E

Increase in Deal Volume Relative to

2018

7thStraight Year of Record Setting Deal Volume


6.6% 12.5%More Deals

Than in Q3 2015

11CAGR from Q3

2015 to Q3 2019CAGR from

2015 to 2019E

75More Deals

Than in 2015

2ECHELON Partners RIA M&A Deal Report | www.ECHELON-partners.com

RIA M&A Deal Report - Third Quarter 2019

125 138168 181

200

2015 2016 2017 2018 2019E

https://www.riadealbook.com/

http://www.echelon-partners.com/

456 540

897 1,046 1,010

1,269 1,342

2013 2014 2015 2016 2017 20182019YTD

Exhibit 5. Percentage Breakdown of RIA Acquirers by Firm Type

Exhibit 4. Average AUM per M&A Deal – Excluding Transactions > $20 BN AUM

76

Growth Relative to 2018

Expected Acquisitions by RIAs in 2019E

55%

Exhibit 4 demonstrates the continuing trend of averagedeal size exceeding $1 BN AUM per transaction. Thefirst half of the year saw relatively few $BN+ AUMtransactions, and originally put the year on pace for adecline in average AUM per deal. The third quarterreverses this trend and challenges the idea that themarket’s record deal volume is being driven only bysmaller firms. The industry is now projected to have 59$BN+ transactions by the end of 2019, 84% more than2018. While most of the industry’s smaller dealscontinue to be completed by RIAs and consolidators,private equity firms and banks dominate these largetransactions, completing nearly all the $20 BN+ dealsand most of the deals over $1 BN in AUM.

Buyer breakdown data for the first three quarters of2019 (Exhibit 5) continues to show an increase in thenumber of acquisitions by RIAs. RIAs were especiallyactive in Q3’s M&A market. During the first half of theyear, RIA-to-RIA transactions made up 35% of thesegments’ deals. By the end of Q3, they’ve accountedfor 38% of M&A activity, moving the category toward alevel it hasn’t seen since 2016 and putting it on track toconduct 55% more deals than it did in 2018.

20%

Compound Annual Growth Rate of Transaction AUM

from 2013-2019


3

Set for

4thConsecutive Year

of $1 BN+ Average AUM

Transacted

ECHELON Partners RIA M&A Deal Report | www.ECHELON-partners.com

44% 44%31%

47% 45% 39% 42% 36%27%

38%

30%23%

34%

31% 35% 42% 40%44%

47% 29%

6% 18%14%

7% 8% 6% 7% 10%12%

9%

20% 15% 21% 15% 12% 13% 11% 10% 14%25%

RIA Strategic or Consolidator Bank Other*

2010 2011 2012 2013 2014 2015 2016 2017 20182019 YTD

Source: Company Reports, SEC IARD, ECHELON Partners Analysis*Other: Private Equity Firms, Insurance Brokers, Independent Broker Dealers, etc.




Exhibit 5 demonstrates the high volume of RIA-to-RIAtransactions that are driving this record-breaking year.Pure-play RIAs are the most active, completing 38% of thetransactions so far in 2019. This is up from only 27% in2018, but still not near the segments’ previous high of47% in 2013. New financing options continue to fuel theability of smaller buyers to execute transactions, however,most RIAs completing deals are doing it to grow, allowingthem to realize operational efficiencies, attract talent, andexperience other benefits that come with increased scale.

The percentage of deals completed by Strategic Buyers orConsolidators decreased, making up only 29% of wealthmanagement deals so far in 2019, a value that falls wellshort of the 47% of deals the category was responsible forin 2018. If this trend continues, 2019 will be the first yearsince 2015 where Strategic Buyers and Consolidators werenot the most active category on the deal volume chart.

Banks continue to hold their place in the bottom of theacquisition chart, completing only 9% of all transactionsso far this year. In 2019 they are projected to completeonly 18 deals, 20% fewer than the category completed in2018. Despite the downturn in volume, banks continueto be active on the industry’s largest deals. CharlesSchwab’s $1.8 BN acquisition of USAA and the CanadianImperial Bank of Commerce’s deal with Atlantic TrustPrivate Wealth Management accounted for two of thethree largest deals recorded in the third quarter,demonstrating that there is still life in the segment.

Other: The other category continued its trend toward arecord year with another quarter of high growth. Thecategory is projected to see 50 deals this year, twice asmany as it saw in 2018. Private equity capital, bothdirectly and indirectly, is fueling much of the activity.Private equity firms are attracted to larger platformswhich have recurring revenue, high margins, andleverageable EBITDA.

Exhibit 6. Top 10 M&A Transactions in Q3 2019

4

During Q3 2019, there were seventeen deals of $1 BN or greater. The largest transaction was Charles Schwab’s acquisition of USAA and its $90 BN in AUM for $1.8 BN. The deal is another indicator of Charles Schwab’s push to expand its identity beyond its historical role as a discount broker. Hub International Limited continued its aggressive M&A push, closing nine wealth management deals in the third quarter, bringing its total for the year to ten completed acquisitions. Hub’s purchase of Global Retirement Partners and its $40 BN in AUM was the second largest deal of the quarter. Focus Financial continues to be the most active deal maker in 2019, closing 19 deals in the first three quarters. The runners up were as follows: Hub International Limited (10), Mariner Wealth Advisors (7), Mercer Advisors (7), and CAPTRUST Financial Advisors (6).


Source: Company Reports, SEC IARD, ECHELON Partners Analysis.

Seller Buyer Buyer Type Seller AUM ($ MM) Date

USAA Charles Schwab Bank 90,000 7/29/2019

Global Retirement Partners Hub International Limited Other 40,000 9/12/2019

Atlantic Trust Private Wealth ManagementCanadian Imperial Bank of Commerce

Bank 20,000 9/6/2019

Mercer Advisors Oak Hill Capital Other 16,500 9/17/2019

Wealth Enhancement Group TA Associates Other 12,000 7/31/2019

StoneStreet Pearl River Hub International Limited Other 4,622 9/19/19

South Texas Money Management CAPTRUST Financial Advisors Strategic or Consolidator 3,700 8/23/2019

LOGiQ Global Partners Ninepoint Partners Other 3,500 7/12/2019

WhartonHill Advisors Hub International Limited Other 3,000 9/20/2019

Brookstone Capital Management AmeriLife Other 2,700 8/22/2019




209 ’13 Total

3922014 Total

4652015 Total

4302016 Total

4232017 Total

5372018 Total

5652019E Total

Exhibit 7. Breakaway Activity Slows in Q3 2019 after a Record Second Quarter


5

8.7%102

More Breakaways Projected in 2019 Than the Annual

Average Since 2015

Increase in Breakaways During Q1-Q3 2019 Over Q1-Q3 2018

Exhibit 7 shows the quarterly breakaway volume

from Q3 2013 through Q3 2019. Breakaway volume

has trended upwards throughout this time horizon.

Q2 2019 was one of two quarters in the time frame

examined where breakaway volume exceeded 150.

The third quarter saw breakaway volume fall

significantly from the record-breaking Q2, but the

138 breakaways were still 22% higher than the

previous quarterly average of 113. Q3’s volume still

puts 2019 on pace for a record year with 565

breakaways, 5.4% higher than 2018, the next highest

year.

Q1 and Q2 both appear to be anomalies. Q2’s record

level may have just been a rebound from the first

quarter’s abnormally low levels. The 6+ year upward

trend that continues through the third quarter

indicates that major breakaway drivers including an

aging advisor demographic, desire for liquidity, aging

business cycle, and wide availability of financing

programs continue to outweigh factors that tend to

lead to a reduction in breakaways. A potential

economic downturn threatens to shake the advisor

community and could lead to a future decline in the

number of breakaways.

The largest breakaway of the quarter was Jonathan

Williams’ and Kevin Curtis’ departure from

Wilmington Trust to Summit Trail Advisors. The pair

adds a combined 37 years of experience and $1.5 BN

in AUM to books of the ultra-high-net-worth-focused

RIA. Despite the continued general increase in

breakaway activity, there were fewer large

breakaways in the third quarter, especially following

the massive departures from First Republic and

Morgan Stanley that Q2 saw. This may be an indicator

that threats of an economic downturn are weighing

on advisors’ confidence to switch platforms.


83 102 104 94 108 86 112 121 119 113 91 176 93 70 123 72 107 121 128 123 139 147 94 192 138

2013Q3 Q4

2014Q1 Q2

2014Q3 Q4

2015Q1 Q2

2015Q3 Q4

2016Q1 Q2

2016Q3 Q4

2017Q1 Q2

2017Q3 Q4

2018Q1 Q2

2018Q3 Q4

2019Q1 Q2 Q3

Trend Line (Logarithmic)




28 2329 32

59

24

20

25 16

7

$BN+ Wealth Mgmt M&A Transactions $1BN+ Breakaway Transactions


Exhibit 9. $BN+ Wealth Management Transactions and Breakaways

Exhibit 8. Top 10 Breakaways as Measured by AUM During Q3 2019

6

Exhibit 8 outlines the top 10 breakaways by AUM in Q3 2019. Average breakaway AUM in Q3 2019 was $259 MM,

which is 18% lower than Q2 2019’s average breakaway AUM of $315 MM, but is relatively on par with Q1 2019’s

average breakaway AUM of $263 MM.

There is more buyer interest in these $1 BN+ AUM targets than in smaller firms, for the following reasons:

1. They Are Ideal Platforms: Most firms with $1 BN in AUM or more are believed to possess the ideal mix of sizeand development.

2. They Are Established Businesses: Firms over $1 BN in AUM often have more infrastructure, systems,management, protective redundancy, and financial wherewithal.

3. Most Have Over $3 MM in EBITDA: Private Equity buyers seek this as a cushion to protect financial performancein the event of a market downturn.



2015 2016 2017 20182019 YTD

Annualized

2019 is projected to have 59 $1 BN+ wealthmanagement M&A transactions, a 84% increaseover 2018’s total, and the highest amount sinceECHELON began recording the data. ECHELONprojects seven $1 BN+ breakaway transactions tooccur this year, less than half the number ofbillion-dollar transactions in 2018.

An increasing number of advisors over the age of60 and the heightened interest in the sector fromprivate equity firms mean that ECHELON isconfident $1 BN+ M&A activity will continue toincrease. Threats of an economic downturn doseem to have shaken the advisor community,weighing on the number of future breakaways.

Firm Joining/Starting Team Size Firm Leaving AUM ($ MM) Date

Summit Trail Advisors 2 Wilmington Trust Advisors 1,600 8/27/2019

Morgan Stanley 1 Oppenheimer & Co. Inc. 1,000 9/6/2019

Raymond James Financial Services, Inc. 1 Wells Fargo Clearing Services 1,000 9/6/2019

Wells Fargo Advisors Financial Network, LLC 1 Wells Fargo Clearing Services 1,000 9/4/2019

Ameriprise Financial Services, Inc. 1 Morgan Stanley 1,000 8/30/2019

Purshe Kaplan Sterling Investments 1 Wells Fargo Clearing Services 1,000 8/23/2019

Purshe Kaplan Sterling Investments 1 Wells Fargo Clearing Services 1,000 8/23/2019

Stifel, Nicolaus & Company, Incorporated 1 Wells Fargo Clearing Services 1,000 7/12/2019

Raymond James & Associates, Inc. 1 Morgan Stanley 1,000 7/11/2019

Wells Fargo Advisors Financial Network, LLC 1 Morgan Stanley 1,000 7/11/2019

52

43

54

48

66




About ECHELON Partners:

ECHELON Partners is a Los Angeles-based investment bank andconsulting firm focused exclusively on the Wealth andInvestment Management industries.ECHELON was formed to:

► Address the needs of an underserved subset of the

financial services industry—investment product

developers, distributors, and technology providers

► Provide objective, unbiased advice void of conflicts

emblematic of larger institutions

► Help entrepreneurs working at companies of all sizes

navigate the numerous complex decisions that come

with attaining growth and liquidity`

Our Expertise

ECHELON’s service offerings fall into three categories:

► INVESTMENT BANKING

► MANAGEMENT CONSULTING

► VALUATIONS

ECHELON’s comprehensive range of services help its clients makethe tough decisions with respect to: acquisitions,sales/divestitures, investments, mergers, valuation, M&Astrategy, new ventures, management buyouts, capital raising,equity sharing, and succession planning.

ECHELON’s business is making companies more valuable throughits visionary advice and execution excellence. Accordingly,ECHELON measures its success by the enterprise value it createsfor its clients. With an unparalleled quantity and quality ofinvestment banking experience in the wealth and investmentmanagement industries, no other investment bank can matchthe caliber of advice or financial results delivered by theprofessionals of ECHELON Partners.

Our History

ECHELON Partners was founded in 2001 by Dan Seivert, thefirm’s current CEO and Managing Partner.

Over the past 18 years, the firm’s principals have completedmore M&A advisory assignments, valuations, and strategicconsulting engagements for its three target industries than anyother investment bank. In that time, hundreds of executiveteams and boards have chosen ECHELON Partners to help themenvision, initiate, and execute a diversity of complex businessstrategies and transactions.

How ECHELON Can Help

Provide Transaction Assistance (Mergers, Sales, Acquisitions,Capital Raising): Valuation and transactions go hand-in-handwhether buying, selling, raising capital, divesting, investingand/or restructuring. The professionals at ECHELON haveextensive experience with these transactions and matching theappropriate deal processes to meet the many objectives of thestakeholders involved.

Conduct a Valuation: Managers need to know firm value and,more importantly, the key drivers of value. ECHELON hasemerged as the leader in delivering high quality valuation reportsthat cut through irrelevant information and tell managers exactlywhat drives value and how their firm is performing.

Continuity & Succession Planning: With its industry-specificexperience and focus, ECHELON Partners equips its clients withcontinuity plans and succession plans designed to mitigate riskand plan for the future. ECHELON develops continuity plans forequity owners who want to put in place a short-term plan for apreviously selected successor to take over their firm in the eventof a catastrophe, such as death or disability. ECHELON’s moreinvolved succession planning process helps equity ownersdevelop a formal plan for their retirement or known departurefrom the firm, whether they want to pursue an internal sale tocolleagues or family, or want to take steps to prepare the firm foran external sale.

Advise on Equity Compensation Structure: As firms grow andevolve, it is common for a wedge to develop between those thatcreate value and those that reap the benefits (through equityownership). This necessitates the development of equity sharingstrategies that are fair, that can foster employee retention, andat the same time minimize tax consequences and complexity.ECHELON is experienced in developing these structures for a hostof unique situations.

Equity Recycling & Management: Managers need a method ofinternal succession whereby a senior partner sells a portion of hisor her equity to either one or more junior partners currently withthe firm or incoming partners not yet with the firm.

Advise on the Buyout of an Equity Partner: A problem thatarises for most firms that remain private occurs when one ormore of the founders needs liquidity or needs to be bought out.These situations require thoughtful valuation and structuringthat corresponds to the particular situation.

ECHELON by the Numbers

20+ Years of experience valuing financial service companies

300+ investment banking advisory assignments

1,500+ valuations conducted

#1 in conducting valuations for wealth managers with $1 BN+ in AUM

400 Investment opportunities vetted and valued

2,000+ acquisition targets evaluated

15 Published reports focused on Wealth Manager M&A, Management Consulting and Valuation

Follow us on Twitter:@echelon_group

1500 Rosecrans Avenue, Suite 416 Manhattan Beach, CA 90266 888.560.9027 | www.ECHELON-partners.com

7

https://twitter.com/echelon_group



ECHELON’s Leadership

DAN SEIVERT | CEO AND MANAGING PARTNER

CAROLYN ARMITAGE, CFP®, CIMA® | MANAGING DIRECTOR

MIKE WUNDERLI | MANAGING DIRECTOR

Dan Seivert is the CEO and founder of ECHELON Partners. Prior to starting ECHELONPartners, Mr. Seivert was one of the initial principals of Lovell Minnick Partners,where he helped invest over $100 MM in venture capital across 15 companies.Before his involvement in Private Equity, Mr. Seivert was a buy-side analyst at TheCapital Group (American Funds) where he valued firms in the asset management andsecurities brokerage industries. Mr. Seivert has helped ECHELON’s clients make thetough decisions with respect to acquisitions, sales/divestitures, investments,mergers, valuation, M&A strategy, new ventures, management buyouts, capitalraising, equity sharing, and succession planning. In his various roles, Mr. Seivert hasconducted detailed valuations on over 500 companies, evaluated more than 2,000acquisition targets, and authored 25 reports dealing with the wealth and investmentmanagement industries. Mr. Seivert has an Advanced Bachelor’s degree inEconomics from Occidental College and a Master of Business Administration fromUCLA’s Anderson School of Management.

Carolyn Armitage is a Managing Director at ECHELON Partners and has more than 30years of experience being a change management catalyst. She improves marketshare, profitability, people, processes and team dynamics for RIAs, Broker Dealersand Hybrid RIAs. Over her financial services career, Ms. Armitage was an OSJ branchmanager, a sales and marketing manager for HD Vest Financial Services, a managingdirector for Western International Securities, head of advisory services for INGAdvisors Network (Cetera & Voya) and head of large enterprise businessmanagement consulting for LPL Financial. Ms. Armitage is devoted to continuouslearning and improvement. She is LEAN Certified, a Six Sigma Green Belt, a CA Lifeand Variable Contracts Agent and holds numerous FINRA licenses. She is a CFP®,CIMA®, and ChFC. She has a Bachelor of Science in Business Administration from theUniversity of Minnesota and a Masters in Management from The American College.

Mike Wunderli is a Managing Director at ECHELON Partners and is integrally involvedin all aspects of the firm’s activities. Prior to joining ECHELON, Mr. Wunderli foundedConnect Capital Group (CCG) where he advised private, middle-market companies onpre-transaction planning, growth financing options and the development andexecution of exit strategies. Before founding CCG, Mr. Wunderli spent 12 years atLehman Brothers and UBS as a Senior Vice President in the Private WealthManagement (PWM) division. During his time at Lehman Brothers and UBS, Mr.Wunderli executed over $2 BN in investment-banking and private-equitytransactions for his clients, and managed over $400 MM for high-net-worth investorsand their families. Over his career, Mr. Wunderli has worked with hundreds ofprivate companies, helping their owners navigate the critical stages of growth andengineer the most appropriate and lucrative exit strategies. He has also worked withmany top investment managers, hedge funds, private-equity funds, family offices,trading desks and a variety of capital providers. Mr. Wunderli received his BA fromBrigham Young University and an MBA from The Wharton School at the University ofPennsylvania.

(e) [email protected]

(p) 888 560 9027 ext. 101


(p) 888 560 9027 ext. 303


(p) 888 560 9027 ext. 202

8

9

ECHELON provided the Management

of Bridgeworth, LLC with:

Valuation andFinancial Advisory Services


of Centennial Securities with:


has completed the acquisition of

ECHELON provided the Managementof Merit Financial Group with:

Valuation andBuy-Side Advisory Services

Horizon Planning, Inc.

Valuation andBuy-Side Advisory Services



of Wealthstream Advisors, Inc. with:


of The Gensler Group with:



of SignatureFD with:

Valuation andM&A Advisory Services



of Rowling & Associates with:


of Retirement Income Solutions with:



of Oakworth Capital Bank with:

M&A Advisory Services


of Massey Quick Simon & Co. with:

Valuation andFinancial Advisory

Services

has agreed to a transaction with

ECHELON provided the Managementof Lexington Capital Management Inc.

with:

M&A andFinancial Advisory Services

M&A andFinancial Advisory

Services


of Halite Partners with:

M&A andFinancial Advisory Services

has agreed to a merger with

ECHELON provided the Managementof FiComm Partners and Nexus

Strategy, LLC with:


of Concentric Wealth Management, LLC with:

Valuation andM&A Advisory Services



of Blue Oak Capital, LLC with:


ECHELON provided the Managementof OBS Financial with:

Valuation andSell-Side Advisory Services

Sample Transactions & Advisory Assignments Executed by the ECHELON Team

Buy-Side Advisory Services


Concentric Wealth Management, LLC with:

Research Methodology & Data Sources:

The ECHELON Partners RIA Deal Report is an amalgamation of all mergers, majority equity sales/purchases, acquisitions, shareholder spin-offs,capital infusions, consolidations and restructurings (“deals”) of firms that are SEC Registered Investment Advisors (“RIA”). The report is meant toprovide contextual analysis and commentary to financial advisors pertaining to the deals occurring within the wealth & investment managementindustries. The deals tracked and identified in the Deal Report include any transaction involving an RIA with over $100 MM assets undermanagement, which have also been reported by a recent data source (e.g., SEC IARD website, a press release, ECHELON Partners Deal Tracker,industry publications). This methodology aims to maintain consistency of data over time and ensure the utmost accuracy in the informationrepresented herein. Additionally, the report includes financial advisors who terminate relationships with other financial service institutions inorder to join RIAs. As with the other transactions reported in the Deal Report, the identified breakaway advisor transitions are transitioning over$100 MM assets under management to a new financial services firm. The reason for this being that transitions of this magnitude are more oftenthan not accompanied with compensation for the transition of assets. The contents of this report may not be comprehensive or up-to-date andECHELON Partners will not be responsible for updating any information contained within this Deal Report.

The ECHELON RIA M&A Deal Report: An Executive’s Guide to M&A in the Wealth Management, Breakaway, and Investment ManagementIndustries.

© Copyright 2019 ECHELON Partners. All rights reserved.No part of this publication may be reproduced or retransmitted in any form or by any means, including, but not limited to, electronic, mechanical,photocopying, recording, or any information storage retrieval system, without the prior written permission of ECHELON. Unauthorized copyingmay subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs andattorney’s fees. The information contained in this report has been obtained from sources believed to be reliable, and its accuracy andcompleteness is not guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness orcorrectness of the information and opinions contained herein. ECHELON can accept no responsibility for such information or for loss or damagecaused by any use thereof. The views and other information provided are subject to change without notice. This report is issued without regard tothe specific investment objectives, financial situation or particular needs of any specific recipient and is not to be construed as a solicitation or anyoffer to buy or sell any securities or related financial instruments.

10

Sample Transactions & Advisory Assignments Executed by the ECHELON Team

ECHELON Partners1500 Rosecrans Ave., Suite 416Manhattan Beach, CA 90266

888 560 9027www.echelon-partners.com

Member: FINRA/SIPC

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to the Wealth and Investment Management Industr ies

Carolyn Armitage, CFP®, CIMA®Managing [email protected] Ext. 303

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Mike WunderliManaging [email protected] Ext. 202

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echelon's ria m&a deal report...in 2017 and 2018. •$1 bn+ deals and breakaways continue...

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