Page 45 - Investment Advisor December 2022/January 2023

BROKER-DEALER BEAT

By Janet Levaux

LPL to Buy a $40B Branch Office With

800 Advisors

The deal is structured as an equity purchase and includes $140 million

to be paid at closing.

PL Financial says it is buying
one of its largest branch offic-
Les: Financial Resources Group
Investment Services, which has 800
advisors working with 85 financial insti-
tutions and $40 billion of advisory and
brokerage assets. Based in Fort Mill,
South Carolina, FRGIS operates as an
affiliated office of supervisory jurisdic-
tion with LPL.
The deal, which LPL expects to close
in 2023, is structured as an equity pur-
chase and includes $140 million to be strength and resources to enhance our new concept into an outsourcing model
paid at closing, with “additional earn-out support of existing client relationships … into the marketplace.”
payments” to be made over the following and to attract new ones, enabling our As the firm has “added these larger
three years, according to a press release. continued strong growth trajectory. institutions, we continue to innovate both
“We are excited to embark on this As of Sept. 30, LPL worked with close in terms of how we support them day in
new phase of our relationship with our to 21,000 financial advisors, about 1,100 and day out, and also just as importantly,
deeply respected, long-standing part- institution-based investment programs how you transition them over. That’s a
ner, FRGIS,” said Rich Steinmeier, LPL and some 500 RIA firms. pretty big change-management effort, as
Financial managing director and divi- Its total advisory and brokerage assets you could imagine,” he explained. Over the
sional president, Business Development, fell 8% year over year to $1.04 trillion, past few years, LPL continues “to make
in a statement. as advisory assets dropped 9% year over our model more and more appealing.”
“This acquisition strengthens our year to $543 billion. But its third-quarter As for recent momentum with large
relationship with a strategically impor- earnings were $232 million (or $2.86 per financial institutions, Arnold said, “over
tant client and provides a foundation on share) vs. $103 million (or $1.26 per share) the past two quarters, we onboarded
which to accelerate expansion of several in the year-ago quarter and $161 million two new clients, CUNA and People’s
strategic growth areas, particularly in the (or $1.97) per share in the prior quarter. United Bank.”
financial institution space,” he explained. The firm is “still very optimistic
“FRGIS is an industry leader of managed MORE VIEWS ON THE CHANNEL [about the] growing durability around
programs for banks and credit unions On LPL’s Oct. 27 earnings call with the growth opportunity” in the insti-
and provides a strategic complement to equity analysts, President & CEO Dan tutional channel and has “a good solid
LPL’s existing enterprise offering.” Arnold emphasized the growth of pipeline. And though these deals are
Financial Resources Group will con- assets tied to clients like banks and a little bit harder to predict in terms
tinue to operate independently within credit unions: The firm has “collectively of the timing because they’re a longer
LPL after the deal closes and will keep added roughly between $65 billion and sales cycle, [we] feel good that we have
its brand and leadership team. $70 billion in large financial institu- an opportunity to continue the momen-
As for FRGIS, “We couldn’t be tion assets over the last couple of years tum,” the executive added.
Adobe Stock according to CEO Bruce Miller. “We look in the demand for the solution or the Janet Levaux is editor-in-chief of Investment
and continue to see strong momentum
more pleased to join forces with LPL,”
offering, which really … introduced a
forward to leveraging LPL’s financial
Advisor. She can be reached at [email protected].

DECEMBER 2022/JANUARY 2023 INVESTMENT ADVISOR 43