LPL reels in three teams from Advisor Group broker-dealers

LPL's haul includes two groups from FSC Securities and almost $1.5 billion in client assets

Oct 3, 2019 @ 2:23 pm

By Bruce Kelly

LPL Financial is starting the final quarter of the year with a recruiting bang, having recently snagging three teams with close to $1.5 billion in client assets from rival Advisor Group broker-dealers.

Earlier this week, Financial Solutions Group of Alexandria, La., with $1 billion in assets and about 10 financial advisers, left FSC Securities Corp. and moved its advisers' registration to LPL.

Also earlier this week, Maxwell Financial Group in New Albany, Ohio, with $250 million in client assets, left FSC for LPL.

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Meanwhile, LPL said in a press release that three advisers with SecondHalf Coach Wealth Management joined the firm from another AdvisorGroup unit, SagePoint Financial, at the end of August. Those advisers, based in Latrobe, Pa., had close to $210 million in client assets.

In May, Advisor Group said private-equity manager Reverence Capital Partners agreed to acquire 75% of the broker-dealer network from Lightyear Capital, PSP Investments and other investors. The two other broker-dealers in the Advisor Group network are Royal Alliance Associates Inc. and Woodbury Financial. Combined, the Advisor Group broker-dealers produced $1.7 billion in total revenue last year.

"We wish the best for these particular advisers, while emphasizing that the overwhelming majority of our advisers has voiced strong support for Advisor Group, and confidence in our commitment to drive their success in partnership with our new owners at Reverence Capital," Advisor Group CEO Jamie Price wrote in an email to InvestmentNews.

Richard Maxwell, CEO of an eponymous firm, said in an interview Thursday morning that he started looking at other broker-dealers after Advisor Group was acquired by its new private equity owner.

In 2016, Advisor Group, at the time a subsidiary of American International Group, was purchased by Lightyear Capital and PSP Investments.

"When Advisor Group was sold again, we started looking for something a little more stable," Mr. Maxwell said. "We looked around for better technology and service. We had no problem with FSC but were looking for a better situation."

"The future there could be great, but we wanted to look around," he said.

Michael Young of Financial Solutions Group did not return a call to comment.

LPL has been aggressively recruiting advisers for the past two years. Over the first nine months of 2019, LPL has seen a net gain of 224 advisers, according to InvestmentNews research. That's the largest such increase for a broker-dealer over that time period except for Woodbury Financial, which closed its acquisition of Questar Capital earlier this year.

While LPL has seen a net gain in recruiting this year, the wirehouses have been suffering.

One advantage for LPL is its recruiting package for advisers with RIA assets. For more than a year, LPL has been selectively offering a bonus in the form of a five-year forgivable loan that pays an adviser 50 basis points on assets transferred to LPL's corporate advisory platform, potentially a far more lucrative structure for the adviser than traditional recruiting deals among independent broker-dealers.

LPL is "seeing a strong response in the marketplace to our offering," wrote a spokeswoman for LPL, Lauren Hoyt Williams, in an email.

Key ingredients for LPL at the moment include its technology, resources, capital available to support practice growth and a stable ownership structure, she added.

"These recent groups joining reflect the broader momentum that we have experienced with us recruiting a record of almost $33 billion in assets under management over the trailing twelve months," she wrote.


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