Three LPL affiliates, including Botsford Financial, create $2.6 billion OSJ

The combined office, led by Merit Financial, will have 60 advisers concentrating on the retirement plan market and high-net-worth clients.
MAR 13, 2018

Three large LPL Financial affiliated practices have merged to create a $2.6 billion firm with an eye on future growth. Merit Financial Group of suburban Atlanta on Tuesday morning said it had bought and merged with Financial Development Systems of Atlanta and Botsford Financial Group of Dallas. The combined firm will have 60 employees and advisers and is an LPL office of supervisory jurisdiction, or OSJ, focused on the retirement plan business and high-net-worth clients. The deal was completed last fall but the firms wanted to wait before making a public announcement, said Rick Kent, president and founder of Merit Financial Group. While each practice will keep its individual branding for the moment, Botsford Financial and Financial Development will eventually work under the Merit Financial Group brand, he said. "We are buying Botsford Financial and calling it a merger," Mr. Kent said. "We are keeping the separate names of the firms. It's important not to have disruption with clients, and it's important to keep the brand going. It will come under one name, Merit, but the timing has to be done strategically." Mr. Kent said that he believes Merit can more than double in size in three years and reach $10 billion in client assets in five years. Three areas will drive growth: mergers and acquisitions; organic growth; and a proprietary financial wellness program. Merit Financial works with retirement plan advisers, while Botsford Financial has high-net-worth clients, he added. Erin Botsford, CEO and founder of Botsford Financial, is not a partner in the new firm but will remain as a consultant and focus on business development, Mr. Kent said. He did not disclose terms of the transactions because the companies are privately held but said that senior people at Botsford Financial received a stake in the new company. Kay Lynn Mayhue, president of Botsford Financial, did not return a call on Tuesday to comment. Jody Owenby, previously the president of Financial Development Systems, is now senior partner at Merit Financial. He also did not return a call Tuesday to comment. Financial Development Systems and Merit Financial know each other well. Financial Development Systems has been part of Merit Financial's OSJ group since 2014. With $2.6 billion in total client assets, Merit Financial Group ranks as the fifth largest firm by amount of assets in the LPL network, Mr. Kent said. "This creates one very large OSJ," he said. A 2017 honoree of InvestmentNews' Women to Watch, Ms. Botsford built her financial planning firm for high- net-worth clients focusing on business owners and senior executives at Fortune 400 companies. Ms. Botsford also routinely has been listed by Barron's magazine in its annual listing of top women financial advisers, and last year reported that Ms. Botsford's firm had more than $1 billion in client assets.

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