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LPL Financial has established itself as a dominant figure in the mergers and acquisitions market since the start of this year, announcing the multibillion-dollar purchase of Commonwealth Financial Network and a partnership with First Horizon Bank’s wealth management subsidiary. Betterment and Carson Group have also jumped into the fray with deals of their own.
The $2.7 billion purchase of Commonwealth will see the firm retain its branding and commitment to supporting advisors, as LPL CEO Rich Steinmeier told analysts during a call last month following the announcement. Steinmeier has held the top role since October, following the dismissal of Dan Arnold for what the company said was a failure to maintain a respectful workplace..
In return, LPL is slated to grow its roughly $1.7 trillion in assets under management by up to $285 billion in advisory and brokerage assets, as well as add 2,900 advisors. Steinmeier even floated the notion that LPL could learn a few things from Commonwealth.
“We deeply respect this firm, and we want to bend LPL to look more like Commonwealth, not the other way around,” Steinmeier said.
Commonwealth would be the latest acquisition in a recent spate of deals from LPL, which include Atria Wealth Solutions, the wealth management arm of The Investment Center and Crown Capital Securities.
Following the tentative Commonwealth pickup, LPL announced it is working to finalize a partnership with First Horizon Bank’s wealth management arm, First Horizon Wealth. If this deal is approved, LPL would provide support for roughly $16 billion in client assets managed by First Horizon.
READ MORE: Commonwealth wins appeal of $93M SEC penalty ahead of LPL purchase
Other wealth management players have been lively with M&A activity as well.
Betterment, the New York-based digital investment advisory firm, announced in February that it was making a play to acquire the automated investment arm of Ellevest, as well as all accounts and assets under management related to just that division.
“On top of automated investing, Betterment offers features that many of our digital clients have expressed interest in, including joint accounts and other cash account options,” Sylvia Kwan, CEO and CIO of Ellevest, said in a statement. “We built a platform that makes it easy to invest in a way that works for our clients’ needs, goals, and values — and the same is true of Betterment under the leadership of their CEO, Sarah Levy.”
Analysts with consulting and valuation firm DeVoe & Co. published data in support of their theory that the pace of M&A deals will outperform that of last year’s, but new tariffs and a recently announced 90-day suspension of reciprocal tariffs from President Donald Trump could derail predictions.
On April 9, Trump announced he would pause higher reciprocal tariffs on certain countries for a 90-day period, while doubling down on tariffs for goods imported from China and raising the charge to 125%, according to a social media post.
READ MORE: We’ve been here before: Advisors share lessons from past financial crises
Expert insights and more M&A coverage below.
How LPL execs are working to acclimate Commonwealth advisors
Following the announcement of LPL Financial’s planned $2.7 billion purchase of Commonwealth Financial Network late last month, LPL CEO Rich Steinmeier has been steadfastly dedicated to showing Commonwealth advisors the benefits of his firm.
The 2019 acquisition of Allen & Co. is an example Steinmeier used to showcase how LPL has handled the consolidation of forces in previous deals with smaller firms. That pairs with other doubt-soothing efforts through town halls, webinars, dinners and more.
“I think there is some skepticism about our intention to retain and defend this community,” Steinmeier told Financial Planning. “And I am trying to make it as clear as possible that there shouldn’t be skepticism, because not only is this absolutely the right thing to do to maximize the experience for these advisors, it’s also the best thing for LPL and Commonwealth.”
READ MORE: LPL’s Steinmeier ‘maniacally focused’ on making Commonwealth advisors feel at home
Betterment inks deal for Ellevest’s automated investment division
Betterment, a New York-based digital investment advisory firm, announced in February that it plans to acquire the automated investment arm of Ellevest, a New York-based wealth management and investment company founded by and tailored for women.
Ellevest was founded in 2014 by Sallie Krawcheck to promote access to wealth management services for women and has since grown to more than $1 billion of assets.
The deal only includes Ellevest’s automated investing accounts and assets under management, which are anticipated to move to Betterment in mid-April of this year provided the agreement is finalized. Ellevest customers can choose to opt out of the transfer.
“This acquisition further cements our leadership in the digital investing space,” Sarah Levy, Betterment CEO, said in a statement. “We look forward to welcoming Ellevest’s clients to Betterment and to continuing to support them on their wealth-building journeys.”
READ MORE: Betterment buys Ellevest’s automated investment arm
Analyst predict pace of RIA M&A deals to stay the course
Experts with consulting and valuation firm DeVoe & Co. are forecasting that mergers and acquisition activity among registered investment advisory firms will surpass last year’s above-average cadence.
The firm’s latest “Annual RIA and M&A Outlook” survey polled more than 100 executives, principals and owners at RIAs, finding that 42% expect the pace of deals to grow beyond last year’s. That being said, it was mainly those from firms with $1 billion or more under management that anticipated an acquisition in the coming year.
“It is likely that the shift among RIAs can be partially attributed to greater awareness of the complexity and investments required to execute an acquisition,” according to the report. “Although a majority of firms still expect to acquire a firm during the next 24 months, a growing number are deciding that there are better ways to achieve their goals.”
READ MORE: RIA M&A deals expected to continue 2024’s hot streak
Carson Group
Carson Group spins up tax program for financial advisors
The growing demand for tax resources among financial advisors has led Carson Group, one of the industry’s largest hybrid RIAs, to launch a new tax solutions program.
Carson Tax Solutions is led by Debra Taylor, a seasoned certified public accountant who agreed to lead the new venture after selling and rebranding her business, Taylor Financial Group, as Carson Wealth in January. Carson Group oversees more than $40 billion in client assets spread across 51,000 households that work with roughly 150 advisory locations and 50 Carson Wealth offices.
“A lot of advisors are shifting more into tax-oriented services. … Consumers expect to have more of a one-stop-shop for their financial needs,” Jaclyn DeJohn, director of economic analysis for SmartAsset, told FP. “They often don’t realize the heavy, heavy tax savings that can come to their bottom line.”
READ MORE: Carson Group launches tax program led by veteran planner
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LPL Financial partners with First Horizon Bank on wealth management arm
On April 7, LPL Financial announced its plans to partner with First Horizon Bank’s wealth management entity to offer advisory and brokerage support.
LPL’s institutional arm, which works in collaboration with banks, credit unions and other financial institutions, is expected to begin its partnership with the Memphis-based bank’s subsidiary First Horizon Advisors in the second half of this year, around the same time its previously announced deal for Commonwealth Financial will close.
The partnership touches upon roughly $16 billion in client assets now managed by 110 advisors in 12 states across the wealth management subsidiary’s footprint.
The firm’s Institutional Services unit has signed many noteworthy agreements in recent years, including the provision of brokerage, RIA and custody services to Prudential Financial in 2023 and the same host of offerings to Wintrust Financial in February 2024.
READ MORE: In new win, LPL gets First Horizon brokerage, advisory business
