Sheridan Road Financial, an advisory firm overseeing roughly $14 billion, has decided to leave Independent Financial Partners, a mega hybrid registered investment adviser, to start up its own RIA.
At the same time, Sheridan Road, which has a sizable retirement-plan business, will be staying with
LPL Financial as its broker-dealer.
Some had questioned what the firm would do after Independent Financial Partners, based in Tampa, Fla., announced in April it
would be starting its own broker-dealer and leaving LPL.
Based in Northbrook, Ill., Sheridan Road, with approximately 30 producing advisers, was among the largest of the firms in IFP's network. More than 520 total advisers currently use IFP's registered investment adviser; those advisers have about $41 billion in assets under advisement and $6 billion in commissionble assets, according to Bill Hamm, president and CEO of IFP.
Daniel Bryant, Sheridan Road's CEO, painted the firm's decision to create its own RIA — Sheridan Road Advisors — as independent of IFP's decision to create its own brokerage.
"It's a logical next step for us," he said. "This has always been our intention, regardless of what IFP is doing."
"We've had a long history with IFP and Bill Hamm," Mr. Bryant said. "We believe there are ways in which we can continue to collaborate."
The firm filed with the Securities and Exchange Commission for the new RIA on May 11, and Sheridan Road Advisors will likely be "effective" within the next 30 days, Mr. Bryant said.
Mr. Hamm said he's known of Sheridan Road's intention to start up its own RIA since the group joined IFP's adviser network eight years ago.
"This was fully expected and it felt like they'd do that at some point in time," he said.
Sheridan Road came into the LPL fold following the brokerage's
acquisition of National Retirement Partners, a network of about 350 retirement-focused advisers, in 2010. That deal led to the formation of the LPL Retirement Partners unit.
LPL's retention of Sheridan Road is welcome news for a firm that has seen a few large retirement-focused groups leave the brokerage within the past two years. There's also been some turnover in the executive ranks, after David Reich left as head of the Retirement Partners unit last year and LPL installed Dan Arnold as its CEO in January 2017.
The company also recently told advisers it was
closing its Worksite Financial Solutions 401(k) platform, which signaled to some that it might be shifting attention away from the retirement group, though the company pushes back against that assertion and says it's still devoting ample resources to the unit.
"LPL has been a great partner to us throughout this process," Mr. Bryant said of his firm's transition.
"We're happy Daniel and Jim have decided to remain with the LPL family," LPL spokesman Jeff Mochal said, referring to Mr. Bryant and managing partner Jim O'Shaughnessy. "We look forward to working with them to help grow their practice and service their clients moving forward."
Mr. Hamm acknowledges there probably will be attrition from IFP, but, based on conversations with advisers, he expects to retain 75%-80% of the firm's production.
"Advisers are getting besieged by other broker-dealers, other OSJs at LPL," he said. "I think they recognize this is one of the few good recruiting opportunities they'll have. Anytime a change happens, and there's perceived blood in the water, it's kind of a frenzy."
He expects to complete the transition to IFP's new brokerage next year toward the end of the first quarter or beginning of the second.
