Forty merger and acquisition deals were completed by registered investment advisory firms in the first half of the year, the best first half ever in terms of deal volume, according to data from the Schwab Advisor Services unit of Charles Schwab Corp.

The 40 transactions involved $30 billion of assets under management, and the average deal size was $771 million.

By comparison 71 deals were completed in all of 2009, involving $103 billion of assets under management.

Dave DeVoe, a managing director of strategic development at Schwab, said the industry experienced significant revenue and profit compression in 2008 and 2009.

But as the market stabilized to a degree and businesses refined themselves to account for the new market environment, profitability increased, he said.

So the deal uptick did not really come as a surprise. Even when reporting last year's dip back in January, DeVoe saw several leading indicators that indicated an M&A recovery was coming this year.

These included improving cash flow, risk becoming more attractive and private equity coming back to the market.

"I think this is a return to that upward momentum that this industry had experienced before 2009 and is expected to experience going forward," he said.

"We had seen strong successive number of years for M&A," he said.

"The structural decline was really driven by the stock market decline."

Though the number of transactions set a record, the deals' size declined. The $771 million average compared with an average size of just under $1.5 billion last year.

DeVoe said the number of sellers with less than $250 million of assets used to comprise roughly one-third of the total but this year accounted for 53%.

He attributed the smaller transaction sizes to the natural gestation cycle of a deal.

They typically take about nine months to negotiate, he said, and the smaller ones take less time to complete than larger ones.

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