Atria Wealth Solutions to be sold to LPL

The recent announcement that LPL inked a deal to purchase the seven broker dealers and 2,400 advisors at Atria Wealth Solutions sent shock waves through the industry.  The seven firms in the Atria network are Cadaret Grant, CUSO Financial/Sorrento Pacific, Grove Point, NEXT Financial, SCF Securities and Western International Securities.  While news of the sale is still fresh and advisors are scrambling to figure out how this affects them, I thought it was important to point out the different types of acquisitions.  

  1. Sale of a broker dealer/RIA with no changes in structure- several of the acquisitions recently fall into this category. The purchasing entity comes in and buys the entire firm with promises to keep everything intact. This type of sale creates little to no change for advisors, from a transition perspective. Since the BD/RIA will remain, no paperwork is needed, the back office remains the same, advisors don’t have to relicense with a new firm and the clearing firm/technology stays the same. If advisors are generally happy with their firm leading up to this type of sale, they will often take a wait and see approach before making a move. Please note that many of these types of acquisitions lately have been by private equity firms and wile change may not be immediate, it commonly comes at some point. This may be in the form of an eventual roll up, staff cuts, changes in structure or even another sale down the road.
  1. Sale of the BD/RIA to a firm with plans to immediately roll the advisors up- The sale of Atria falls into this category. Advisors will be deciding if they want to move their business to LPL, which comes with lots of change. Specifically with this merger, as LPL is self-clearing and will result in advisors having a different custodian. Advisors facing this conversion will question how this affects their business, specifically: is their business model a good fit for LPL, are there changes to the financial structure, are the products/third party money managers currently being used available etc.?  Historically we have also seen rollups result in the acquiring firm deciding on an individual basis which advisors they want to bring on. Typically, background checks and business model evaluations will be done and could result in advisors not being brought on.

Without question, change is a constant in the financial services industry. We have seen firms being acquired at a rapid pace for some time now. It’s important for advisors to know they have power when things change and that they deserve to work with a firm that suits their needs best.