LPL Financial Holdings this month said it was laying off 55 workers in Houston who worked at Atria Wealth Solutions, a firm which LPL acquired last year.
At the same time, LPL is in the middle of a charm offensive designed to calm advisors within the near-3,000 financial advisors registered with Commonwealth Financial Network, which LPL announced it was acquiring for $2.7 billion at the end of March.
LPL is an acquisition machine, but the two deals are designed differently, LPL insiders and industry observers were quick to note.
The purchase of Atria, with 2,400 financial advisors and an asking price of $805 million, was built on eventually integrating the firm into LPL and benefiting from savings. Meanwhile, the acquisition of Commonwealth is built to keep the firm as a separate entity inside of LPL.
Atria reported the layoffs on May 14 to the Texas Workforce Commission, according to that organization’s website. The Atria broker-dealer, Next Financial Group, is based in Houston.
LPL announced in February 2024 it was buying Atria. At the time, one analyst noted such an effort to onboard or integrate 2,400 financial advisors onto LPL was a “complex” proposition.
After an acquisition, it’s typical for the buying broker-dealer to make overtures that change in staffing and procedures will be minimal, but then those promises over time eventually go by the wayside, industry observers noted. What’s unusual in LPL’s purchase of Commonwealth is the former’s assurances that this is a different kind of acquisition and the service-focused culture of Commonwealth will stay untouched.
“LPL has gone to great lengths to convey to the Commonwealth community that we remain intact and that the finest and best parts of the community and culture will be preserved,” said one veteran Commonwealth advisor who spoke privately to InvestmentNews about the matter. “And LPL has put that in writing.”
“All signs remain pointing that way,” the advisor said. “This is not your typical M&A deal for a broker-dealer.”
For years, Commonwealth Financial Network has presented itself in the marketplace as a boutique that focuses on service and culture and competed hotly with LPL for financial advisors.
The firm is a closely held partnership of more than a dozen executives, owned and controlled by Joseph Deitch, one of the forerunners of the independent contractor and registered investment advisor business model for advisors. Deitch has been the owner of Commonwealth for more than 40 years.
A spokesperson for LPL was quick to note that LPL’s deals for Atria and Commonwealth were structured differently; LPL is absorbing Atria and its advisors while its is promising to keep its hands off Commonwealth.
“There’s never been the notion that Atria would be a standalone enterprise,” the LPL spokesperson said. “The Commonwealth deal is different and designed to keep the firm’s culture, brand and service.”
The spokesperson added that LPL has offered some of the laid off Atria employees new or different positions at the company. It’s not clear exactly the types of jobs those employees had.
Meanwhile, LPL has stated its goal is to retain 90% of Commonwealth’s advisors, even as competitors at large and small firm deluge those advisors with counter offers.
“The data say we are going to hit that number,” said Rich Steinmeier, LPL’s CEO in an interview last week and before the layoffs at Atria became public. “Our firm is going to be better in the future because it’s being combined with Commonwealth.”
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