Advisors Leave LPL Following Commonwealth Acquisition
Key Insights
Nearly $1 billion in assets are in the process of leaving Commonwealth Financial Network for other broker/dealers following LPL's acquisition.
Competitors are attracting advisors with competitive pay, open architecture technology, and the ability to stay on Fidelity Investments’ National Financial Services (NFS) custody platform.
October saw the highest attrition rate for Commonwealth, with 116 advisors departing, bringing the total to 243 since the acquisition.
Advisors are seeking firms that align with their business models and offer the technology and support they need to serve their clients effectively.
The acquisition has led some advisors to reconsider their business models and choices of affiliation.
In-Depth Analysis
LPL Financial's acquisition of Commonwealth Financial Network has triggered a wave of advisor departures, signaling potential challenges in integrating different firm cultures and technological platforms. Competitors like Cetera, Osaic, and Raymond James are capitalizing on this transition by offering attractive packages and ensuring continuity with preferred custodial services like Fidelity’s NFS. The advisors leaving Commonwealth are seeking environments that support their business models and provide the necessary resources to serve their clients effectively. This situation underscores the importance of cultural alignment and technological compatibility in successful mergers and acquisitions within the wealth management industry.
Several firms have made notable moves:
Cetera: Added Christian Benard and his firm, Innovative Financial, with $365 million in assets under administration (AUA). Benard cited Cetera's tax-focused Avantax channel and continued use of Fidelity NFS as key factors.
Osaic: Recruited Gallagher Financial Services ($194 million AUA) and Four Pillars Investment Management ($143 million AUA).
Raymond James: Brought on Kirk Huismann ($144 million AUA) and Richard Salmeron ($140 million AUA).
FAQs
Q: Why are advisors leaving Commonwealth Financial Network after the LPL acquisition?
Advisors are seeking firms that better align with their business models, offer desired technology platforms, and provide continuity with custodial services like Fidelity NFS.
Q: Which firms are benefiting from the advisor departures?
Cetera, Osaic, and Raymond James have all successfully recruited advisors from Commonwealth.
Q: What are the main concerns driving advisors to leave?
Concerns include maintaining a boutique culture, access to specific technology, and the desire to continue using Fidelity’s NFS custody platform.
Key Takeaways
Advisors are carefully evaluating their firm affiliations following mergers and acquisitions.
Cultural alignment, technology, and custodial preferences are key factors in advisor decisions.
Firms looking to attract advisors should focus on offering competitive packages, open architecture technology, and support for various custodial platforms.
Monitor advisor attrition rates during and after acquisitions, as they can signal integration challenges.
Discussion
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