[pullquote]Banks and the independent advisory model do not fit[/pullquote] Boston Private Bank & Trust, a division of Boston Private Financial Holdings, is buying Banyan Partners — one of the industry’s fastest-growing wealth managers, with $3.7 billion in assets under management and $4.3 billion in total assets. Boston Private will pay approximately $60 million in cash and stock upon closing the deals.
But not everyone believes that the Boston Private deal — or bank acquisitions, more broadly — are a forecast of things to come in the RIA business.
“We do not believe the Boston Private-Banyan deal will have a significant impact on industry deals, especially as it relates to transactions between and among advisors themselves,” says Colony Group’s Nathanson.
“Like many bank deals, this one appears to be priced based on specific synergies that the parties hope to realize on a combined basis. Our industry has seen a handful of analogous deals, and history would suggest that the M&A market for RIAs recognizes these deals as outliers.”
Another RIA executive, who does not want to be identified, has an even harsher assessment of banks.
“Banks and the independent advisory model do not fit,” the executive says. “Banks are product distribution mechanisms.”
“When firms are bought by banks,” the executive adds, “what we see is a lot of asset migration.”