LPL Financial announced Tuesday it closed a $12 million acquisition of Chicago-based trading platform Blaze Portfolio in a move to expand its trading and rebalancing technology for the firm’s 17,000 financial advisers.
The integration of Blaze’s technology into the LPL ClientWorks platform will take about a year to complete, according to LPL Chief Investment Officer Burt White. LPL will retain Blaze’s employees and continue to offer its services as a stand-alone tech product.
In addition to the initial purchase price, LPL has agreed to a potential contingent payment of up to $5 million subject to milestones and customary purchase price adjustments, according to the announcement.
Blaze Portfolio, which was founded in 2010, is an attractive acquisition for LPL as the fintech’s trading platform can serve as a gateway for more advisers to run a model portfolio-based practice — a major trend among the advisory industry this year, according White.
“We don't always talk about this move to models-based practices among advisers,” White said. “What Blaze allows us to do is round out our spectrum of models-based practices so advisers can tap into things like tax management or ESG-investing.”
In fact, the popularity of model portfolios has been evident as large industry players — from Envestnet to Oranj — have ramped up offerings to keep up with advisers looking to outsource investment management and focus on other parts of the advice business.
Yet, research shows advisers are still struggling with adoption. Just one in 10 advisers currently use a model marketplace to access third-party portfolio strategies, based on a survey from the data analytics firm YCharts. Of those not using a model marketplace, 39% would be interested in using one in the future.
Additionally, with Blaze advisers have access to technology that enables them to do the same type of trading and asset management a professional portfolio manager would be able to do — enhancing the adviser’s value proposition in a time when “do it yourself” free trading has become increasingly popular among investors, White said.
“There is a huge demand for advice, but it comes down to value — it’s not about execution anymore,” White said. “Value is the new element of advice and trading unlocks the doors for advisers to show clients there is a major difference between them and a DIY investor that doesn't have the tools to deliver results and experiences.”
Blaze Portfolio currently serves 135 investment firms and pricing for its adviser-facing trading system is based on assets and number of accounts, according to Blaze Portfolio President Bryson Pouw.
However, the acquisition could switch things up and “play into the pricing,” he said.
RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.
Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.
The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.
Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.
New report shines a light on how Americans view wealth today.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
