By Andrew Welsch

LPL Financial's largest acquisition ever is generating a lot of interest from competitors as they attempt to recruit advisors from Commonwealth Financial Network, which LPL said it would purchase for $2.7 billion.

Rivals such as Cetera are wooing Commonwealth advisors as are independent headhunters representing other firms, who are pitching advisors on opportunities and lucrative hiring bonuses to join rival wealth management companies.

Despite fierce competition, LPL says it is on track to meet its retention goal of 90% and is working hard to explain to Commonwealth advisors the benefits the acquisition will have for them.

"We're very happy with how it is pacing," Scott Posner, managing director of business development at LPL, tells Barron's Advisor. "It's exceeding our internal metrics."

LPL expects the acquisition to close in the second half of this year, and the coming weeks and months will prove critical as it tries to convince 2,900 Commonwealth advisors (and the $285 billion assets they oversee) to stay put. LPL's stock is up 18% this year compared with a 1% gain for the S&P 500.

Because Commonwealth's advisors are 1099 contractors, they own their practices and rely on the independent broker-dealer for technology and an investment platform. That also means they can move with relative ease to the competition.

LPL's pitch. Among the benefits LPL says Commonwealth advisors will get: The San Diego-based wealth manager plans to retain Commonwealth's brand and keep its 2,900 advisors as a separate community. Posner says Commonwealth advisors have told LPL that they appreciate that. Importantly, LPL won't require advisors to "repaper" client accounts, a paperwork intensive process for moving client accounts from one firm to another (and something advisors may have to do if they opt to join a rival company).

Commonwealth advisors will gain access to LPL's technology. On this point, Posner says it will enable advisors and their staff to be more productive. Posner adds technology is an area where few firms can match LPL's investments because of the company's growing scale (it has $1.8 trillion in assets and about 29,000 advisors). "The gap between what we spend and what other firms spend is expanding," he says.

Posner says that LPL is also emphasizing to advisors that wealth management is the company's only business. "We don't have a bank, an asset manager arm, or something else," he says. "When we spend $1 of technology investment, and we spend billions of dollars every year, they know we are only spending it on advisors. We're not spreading the peanut butter around, so to speak."

The company is also offering Commonwealth advisors personalized retention bonuses that go as high as 50 basis points on an advisors' assets under management, depending on individual circumstances Other firms are reportedly offering advisors higher recruiting bonuses to move. Posner declined to comment on those deals.

Posner's team, which numbers about 350 people, are meeting with Commonwealth advisors to communicate what LPL sees as the acquisition's benefits, either virtually, in person, or via VIP tours of LPL's main offices in San Diego and Fort Mills, S.C. The company's top brass is also getting involved. For example, LPL Financial's CEO Rich Steinmeier has gone on bike rides and participated in wine tastings with advisors.

Great practices. All acquisitions within the wealth management industry draw attention from recruiters who see it as an opportunity to hire advisors who might not otherwise have considered switching firms. As recruiters might put it: If you're going to wind up with a new firm regardless, why not consider your options?

That the Commonwealth acquisition is generating more public attention than some of LPL's past acquisitions doesn't surprise Posner.

"Commonwealth advisors are a special breed," he says. "The firm has cultivated advisors who have built great practices. They are advisors that other organizations would want to have. It's why we were so excited to join with them."

The task for Posner and his team is generating the same level of excitement from Commonwealth advisors about joining LPL.

Write to Andrew Welsch at andrew.welsch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 21, 2025 14:40 ET (18:40 GMT)

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