LPL Buys NPH
August 15, 2017 by Janet Levaux
LPL Financial confirmed industry speculation late Tuesday, saying it would buy National Planning Holdings’ four broker-dealers: National Planning Corp., Invest Financial, Investment Centers of America and SII Investments.
While LPL has about 14,300 advisors and $540 billion in assets, the four NPH broker-dealers have about 3,200 advisors with $120 billion of assets — putting the combined group at 17,500 reps and $660 billion in assets. LPL Financial is a self-clearing and custody firm, while three NPH BDs rely on Pershing and one on Fidelity.
“The demand for financial advice continues to grow, and the independent model is the fastest-growing part of the industry,” said Dan Arnold, LPL Financial president and CEO, in a statement. “We are committed to being a leader in our core markets, so we are excited to announce our purchase of NPH, which brings us together with one of the largest U.S. independent broker-dealer networks.”
The initial purchase price is $325 million, though LPL says it will pay up to $123 million in the first half of 2018, based on how much of NPH business — and how many advisors — move onto LPL’s platform.
No contingent payment would be due if less than 72% of NPH production (fees and commissions revenue) is onboarded, according to LPL, “and the amount of the contingent payment increases on an interpolated basis for onboarded production in the range of 72% to 93.5%.”
The deal was signed and closed Tuesday, following regulatory approval.
LPL will “onboard” NPH advisors and client assets onto its platform rather than integrating NPH’s operations with its existing business; NPH will maintain its operations during the onboarding period.
The “two waves” of movement should be wrapped up by March 31, 2018.
“Given the similarities in LPL’s independent model to the NPH model, we believe LPL is the ideal acquirer to ensure continuity of the quality service and support for our clients and their financial advisors,” explained Scott Romine, president and CEO of NPH.