All kinds of B-Ds, not just the giants, are making deals

Jodie Papike of Cross-Search and Frank Congemo of Purshe Kaplan Sterling

'Those offers from smaller firms don’t always get as high as those from the bigger players, but they are pretty darn close,' says a recruiter.

With the boom in mergers and acquisition involving broker-dealers and registered investment advisors showing no sign of slowing down, it turns out that brokerage firms other than giants like LPL Financial, Osaic and Cetera Financial Group are targeting acquisitions of firms or financial advisors.

According to a recent filing with the Securities and Exchange Commission, Lincoln Investment Planning, based in suburban Philadelphia and reporting close to $400 million in annual fees and commissions, has been making some acquisitions of its own this year.

In comparison, LPL Financial reported $8.6 billion in 2022 and Osaic – then Advisor Group – about half that amount.

“In January 2024, the company entered into multiple asset purchase agreements with financial advisors based in Florida, Michigan and Texas,” according to Lincoln Investment’s Focus report, which it filed with the SEC at the end of last month. “The fair value of the acquisitions, after determination of the contingent consideration, was $8.8 million and included $4.1 million in cash paid to the seller and $4.7 million representing the fair value of the notes payable due to the seller.”

That’s not all. According to the Focus report, the firm received another $10 million from its parent company, Lincoln Investment Capital Holdings, at the end of January “to fund additional asset purchases and other capital investments.”

A spokesperson for Lincoln Investment Planning did not return a call on Thursday to comment.

The public listing and renaming this week of the broker-dealer aggregator Wentworth Management Services, now called Binah Capital Group, brought attention to smaller firms putting a stake in the ground in the wealth management industry. Size and scale are widely believed to be the necessities for success in wealth management, but small and midsize broker-dealers are making a go of it, too.

Lincoln Investment Planning, with 1,000 financial advisors and more than $46 billion in assets, is by no means a small firm. But it’s not a giant like LPL or Osaic and it’s not publicly listed, like LPL, or owned by private equity like Osaic.

“I think it’s healthy for the smaller firms to be active,” said Frank Congemi, a veteran financial advisor based in Lighthouse Point, Florida, who’s currently registered with Purshe Kaplan Sterling Investments, one of the Binah Capital Group firms. “These big firms, LPL, Osaic, and what they are doing, it’s the advent of financing. Buyers are packaging these brokerage or RIA businesses and selling the revenue stream.

“I get offers for my firm every week,” Congemi said. “But we still run our own shop. I’d rather be at a smaller firm who knows who you are when you call the home office.”

“Some people assume it’s only the biggest firms that can offer an upfront transition bonus to advisors,” said Jodie Papike, president of recruiting firm Cross-Search. “But there’s also another category of quality firms that are being aggressive with such bonuses, and they are smaller and not publicly traded or owned by private equity.

“Those offers from smaller firms don’t always get as high as those from the bigger players, but they are pretty darn close,” Papike said. “And some veteran, experienced financial advisors just don’t want to be with the biggest firm.”