The 10 biggest transitions among independent brokers in 2021

Five of the top 10 financial advisor hires or M&A transitions among independent brokerages this year led to the closure or reorientation of a brokerage firm.

In the latest phase of the ongoing record consolidation of wealth management, expanding giants such as LPL Financial, Cetera Financial Group, Mariner Wealth Advisors, Captrust and Hightower are often recruiting and buying out firms or former mid-size competitors . LPL recruited new teams as part of four of the 10 largest companies and brokerages that entered the independent brokerage channel, moved between companies or left it in 2021, according to Financial planning‘s follow-up of the company’s recruitment and announcements of offers.

The 10 moves involve more than 2,100 advisors and nearly $165 billion in client assets. LPL’s competitors have also attracted large teams and companies: At least 28 teams or companies with $1 billion or more in client assets switched or dropped an independent BD in 2021, compared to at 13 in 2020. With more outside investors, potential buyers and potential sellers than ever before, wealth management M&A transactions are always a “recruitment exercise” with parties engaging in “a process of mutual learning said Rudy Adolf, CEO of Focus Financial Partners. .

“They have to convince us that these are really quality companies,” Adolf said. The firm never invests unless Focus and the firm are “convinced that we can add value to them”, he said. “That’s the basis of the partnership.”

Focus and other consolidators and RIA platforms generally consider themselves to be in a separate channel from independent brokers, but companies entering their ranks or using their services can also choose to use a BD and adopt a similar structure. to that of most advisors with LPL or Cetera. On the other hand, companies such as Wealth Enhancement Group and Carson Group offer setups comparable to RIA Consolidators with the option to use LPL or Cetera’s BD. Additionally, when a BD buys another BD or attracts a team that has their own BD, the incoming firm’s brokerage leg will close or transition to more limited use.

As the traditional wealth management divide between brokerages and RIAs becomes increasingly blurred each year under the blizzard of M&A transactions, many firms are embracing their transition services as essential tools to seduce counselors and their practices. Independent wealth managers argue that they will provide the easiest and least disruptive landing points.

For example, earlier this month, Commonwealth Financial Network launched its virtual transition support services, according to Nancy DiBattista, the company’s senior vice president for field transition and development operations. At the beginning of the year, the company deployed a specialized suite of services specifically aimed at independent brokers, following LPL, Raymond James, Kestra Financial and other rivals to offer teams of former wiring agents and employees more structured transitions to independence with greater assistance from company personnel.

As part of the virtual transition program, a five-person team led by DiBattista in the company’s offices in San Diego and Waltham, Mass., supports the process by opening accounts, assisting with completing relevant forms and obtaining customer data and signatures.

“Before launching this, it was really the adviser doing all this work,” DiBattista said. “That’s probably the least fun part of the transition.”

To see which companies have attracted the biggest recruits and inbound practices and acquisitions in the IBD channel, scroll through our slideshow. For a look back at the biggest moves of 2020, Click here.

Note: The amount of client assets in each move comes from the company that added the practice or company. Figures are not independently verifiable in most cases. Companies that lose business often dispute accuracy. Additionally, some transitions may be slightly higher or lower than the amount of assets declared by companies at the time of announcements.

The dates of the moves come from FINRA BrokerCheck, the SEC website IAPD and company announcements. Where possible, the date refers to the date their affiliation officially changed on BrokerCheck. The imminent move of CUNA Brokerage Services to LPL will certainly be the most important or one of the most important recruitment movements in 2022, rather than from this year. The companies do not expect to complete the transition until early next year.