LPL in talks to sell 401(k) rollover platform to Global Retirement Partners

The sale would keep the platform in the LPL network, and could be used as a way to lure retirement advisers away from Independent Financial Partners

Jun 12, 2018 @ 4:49 pm

By Greg Iacurci

LPL Financial is in talks to sell Worksite Financial Solutions, a platform that helps advisers service 401(k) rollovers, to Global Retirement Partners, the largest retirement-focused advisory firm in LPL's network.

LPL, the largest independent broker-dealer in the country, told financial advisers last month that the firm was planning to close Worksite Financial Solutions at the end of September. Andy Kalbaugh, managing director and divisional president of national sales and consulting, said the program didn't serve a "substantial portion" of advisers or meet "the return on investment needed to continue."

But, LPL-affiliated 401(k) advisers have privately said the platform is useful and that they were sorry to see it go.

Geoff White, managing partner at GRP, confirmed to InvestmentNews that executives from the firms were in discussions over a transaction.

"We're talking to them about it, and trying to gauge whether they'd be interested," Mr. White said. "We just haven't had all the conversations yet," he added.

An LPL spokesperson wasn't immediately available to comment.

Worksite Financial Solutions primarily supports 401(k) rollovers. Advisers can use the open-architecture program — which comes with a call center, as well as marketing and other support — to place participants in retail investment accounts when they roll money out of a workplace retirement plan. The platform also gave participants the option to have their 401(k) managed by the LPL home office or an LPL adviser.

If completed, the deal would benefit both firms. Instead of discarding a program it has supposedly invested millions of dollars in over the years, LPL can keep its current users happy and custody new retail assets gathered through the platform.

For GRP, whose 300-plus retirement-plan advisers oversee more than $70 billion in defined-contribution assets, executives see it as a way to potentially generate more wealth-management revenue.

"We are very interested in doing it and figuring out if there's something there, because we think it'd be a huge value-add and would generate new revenue," Mr. White said. "As firms continue to develop out the wealth-management side of their business, it's a perfect solution for that."

GRP also sees it as an effective recruiting tool, especially in the wake of Independent Financial Partners, a mega hybrid RIA affiliated with LPL, announcing it will leave LPL next year to start its own broker-dealer. The thinking is: This may give retirement-focused advisers at IFP a reason to join Global Retirement Partners (and therefore remain affiliated with LPL) rather than affiliate with IFP's new broker-dealer.

"We've been asked by a bunch of the current IFP firms to see what we could do about retaining that," Mr. White said, in reference to Worksite Financial Solutions.

Chris Hamm, the chief operating officer at IFP, said he is unaware of the ongoing sale discussions, but that the firm is building out its own platform that "does what Worksite does and much more."

"If that's something GRP sees as an important part of their lineup, that's great for them," Mr. Hamm said. "We'll continue building out the equivalent of that."

(More: $14 billion hybrid Sheridan Road staying with LPL, launching own RIA)

A deal with LPL would see Worksite Financial Solutions fall back under the purview of Bill Chetney, the founder of GRP and former head of LPL Retirement Partners. Mr. Chetney oversaw the launch of the platform in 2013.

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