For LPL's CEO Rich Steinmeier, the acquisition of Commonwealth Financial Network sounds like it's getting a bit personal.
LPL Financial Holdings Inc. at the end of March announced its $2.7 billion, all cash acquisition of leading independent broker-dealer and longtime rival Commonwealth Financial Network.
The close to 3,000 financial advisors who are registered with the firm are, on average, among the highest revenue generating advisors in the independent brokerage industry and are prized not only by LPL Financial, an acquisition machine, but broker-dealers and registered investment advisors that compete with LPL.
As part of its attempt to win over Commonwealth’s advisors, who are not employees and therefore free to take their business elsewhere, LPL, led by its CEO, is engaging in what sounds like a charm offensive with some Commonwealth advisors.
Indeed, Steinmeier over the past five weeks has visited Commonwealth advisors, taken bike rides in stormy weather with them and sipped wine, all as part of an effort to send the message that LPL respects the close-knit Commonwealth culture and does not want to upset that culture, although the firm is being acquired.
“Just even in just this week alone, I’d [point to] a couple of great conversations I personally had with Dan and Carrie Pennise during a rain soaked bike ride in Scottsdale with 21 other advisors and family,” Steinmeier said Thursday afternoon during a conference call with analysts to discuss first quarter earnings.
“I was out on a wine tasting tour, actually a blind wine tasting, with Raegan Saylor, Wes Botto, and other advisors, again, having casual interactions,” he said. “I had lunch on Sunday in Sacramento with Leslie Roper Day. And just having those interactions to hear, you know, where they stand.”
LPL’s target is to move to their brokerage and RIA platform 90% of Commonwealth’s current clients, with close to $285 billion in assets.
LPL is fending off significant competitors who are chasing after those Commonwealth advisors, including Raymond James Financial Inc., Ameriprise Financial Inc. and Fidelity.
Steinmeier said on Thursday that he like LPL’s chances.
“I’m not sure that there are a lot of credible players that Commonwealth advisors would consider as an alternative to LPL,” he said. “I think there are a couple out there, and they’re being very active. I think you see a lot of the smaller players trying to take and assert themselves into this market opportunity.”
“It’s just going to be a struggle for them to be competitive relative to our robust set of capabilities, especially when you think about how we have been very clear on that we are keeping the Commonwealth experience,” he said, adding that included the firm’s brand, its service associates, trips, study groups, and practice consultants that help advisors grow their businesses.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
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.