Five of the 10 largest financial advisor recruiting or M&A transitions among independent broker-dealers this year have led to the closing or repurposing of a brokerage firm.
In the latest phase of wealth management’s ongoing record consolidation, expanding giants such as LPL Financial, Cetera Financial Group, Mariner Wealth Advisors, Captrust and Hightower are recruiting and often buying up practices or former midsize competitors. LPL picked up new teams as part of four of the 10 largest enterprises and brokerages that entered the independent brokerage channel, moved between firms or left it in 2021, according to Financial Planning’s tracking of company recruiting and deal announcements.
The 10 moves span more than 2,100 advisors and nearly $165 billion in client assets. LPL’s competitors attracted large teams and enterprises as well: At least 28 teams or enterprises with $1 billion or more in client assets changed or dropped an independent BD in 2021, compared
“They need to convince us that these are truly quality businesses,” Adolf said. The firm never invests unless both Focus and the practice are “convinced that we can add value to them,” he said. “This is the foundation of the partnership.”
Focus and other RIA consolidators and platforms usually count themselves as in a separate channel from independent brokerages, but firms entering their folds or using their services may also elect to use a BD and take on a similar structure as most advisors with LPL or Cetera. On the other side, firms such as Wealth Enhancement Group and Carson Group offer comparable setups as the RIA consolidators with the option of using LPL or Cetera’s BD. Plus, when one BD buys another BD or attracts a team that has its own BD, the incoming firm’s brokerage arm will either shut down or go to a more limited use.
With the traditional wealth management divide of brokerages and RIAs growing more blurry every year under the blizzard of M&A deals, many firms are embracing their transitional services as critical tools for wooing advisors and their practices. Independent wealth managers are making the case that they’ll provide the easiest, least-disruptive landing spots.
For example, earlier this month, Commonwealth Financial Network launched its Virtual Transition Support services, according to Nancy DiBattista, the firm’s senior vice president for transition and field development operations. At the beginning of the year, the firm
Under the virtual transition program, a team of five under DiBattista in the firm’s San Diego and Waltham, Massachusetts-based offices takes over the process by opening up accounts, helping to complete the relevant forms, and getting data and signatures from clients.
“Prior to us launching this, it was really the advisor doing all this work,” DiBattista said. “It's probably the less fun part of the transition.”
To see which firms reeled in the largest recruits and incoming practices and acquisitions in the IBD channel, scroll down our slideshow. For a look back at the biggest moves of 2020,
Note: The amount of client assets in each move comes from the firm that added the practice or enterprise. The figures aren’t independently verifiable in most cases. Firms losing business often dispute the accuracy. In addition, some transitions may be slightly larger or smaller than the amount of assets the companies stated at the time of the announcements.
The dates of the moves come from FINRA BrokerCheck, the SEC IAPD website and company announcements. Wherever possible, the date refers to the date their affiliation changed formally on BrokerCheck. CUNA Brokerage Services’ impending move to LPL will almost certainly be the largest or among the largest
