LPL's purchase of NRP: A closer look

Indie giant will gain 350 reps handling more than 5,700 plans

Jul 18, 2010 @ 12:01 am

By Jessica Toonkel and Bruce Kelly

With anticipation building about its $600 million IPO, LPL Investment Holdings Inc. last week said that it is acquiring the assets of National Retirement Partners Corp., an advisory and brokerage firm that specializes in defined-contribution retirement plans.

When the deal is done, NRP will become LPL Financial Retirement Partners and be headed by Bill Chetney, NRP's chief executive and president, according to a statement from the firm. The acquisition is expected to close in the fourth quarter.

“In deference to LPL's post-S-1 quiet period, we have no comment beyond the public documents regarding this transaction,” said Doug Nolte, vice president at NRP.

LPL also declined to comment because of the quiet period, said Michael Herley, a spokesman. It remains unclear when LPL will launch the initial public offering.

Both LPL and NRP focused on growth and acquisitions before the market collapse of September 2008.

During the past decade, LPL has mushroomed into the industry's largest independent-contractor broker-dealer, growing from 3,569 advisers in 2000 to 12,026 as of March 31 through a strategy of broker-dealer acquisitions and recruitment.

LPL's acquisition of NRP comes as competitors such as Bank of America Merrill Lynch step up their focus on the retirement plan market. Just last week, BofA said that it had tapped two executives from Fidelity Investments' retirement services group, Rich Linton and Steve Ulian, to help run its business.

“We view the retirement plan market as a strategic priority for the firm,” said Andy Sieg, head of BofA's retirement and philanthropic services.


In 2007, NRP bought Oberlin Financial Corp., a broker-dealer, and rechristened it NRP Financial.

At the time of that deal, the network had 79 member firm offices. Currently, according to its website, it has 150 member firms serving 5,700 client companies that sponsor 401(k) plans.

Those member firms are affiliated with about 350 brokers, all of whom sell and provide service to retirement plans. In 2008, those brokers managed 401(k) plan assets of about $36 billion.

According to audited financial statements filed with the Securities and Exchange Commission, NRP Financial had net income of $796,000 last year. Its total revenue was $42.2 million, with $28.1 million of that coming from commissions, $8.6 million from 12(b)-1 fees and $1.8 million from investment advisory fees.

In its SEC filing, NRP Financial said it took a needed capital infusion from its parent company last year. NRP “contributed additional capital of $840,000 to the [broker-dealer] which includes $258,000 related to the settlement” of a 2009 tax obligation, the firm said.

One question that remains is whether LPL will maintain the NRP brand name, which some advisers think is an important differentiator in the retirement marketplace.

“We specialize in 401(k) plans, and no broker-dealer serves this market as well as NRP,” said one broker, who asked not to be identified and who is considering a move to NRP — but will do so only if LPL keeps the NRP name.

Dave Kulchar, an adviser at Oswald Financial Inc., which is affiliated with NRP, said that he was told by company officials that it will be able to continue to use the current name after the acquisition.

“My understanding is that we will be able to brand ourselves under the NRP name,” he said.

NRP Financial representatives and advisers use Pershing LLC as their clearing firm. LPL has its own clearing platform.

“Through this acquisition, [NRP's] independent advisers will have the opportunity to join LPL Financial,” the firms said in a statement.

E-mail Jessica Toonkel at and Bruce Kelly at


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