When it comes to acquisitions, look for LPL Investment Holdings Inc. to shy away from a blockbuster-type deal for another broker-dealer. Instead, the publicly traded company will focus on smaller, specialized companies that can expand LPL's offerings to its 12,500 reps and advisers.
Those were the closing comments this morning of Robert Moore, chief financial officer for LPL. Mr. Moore was speaking in New York at the Sandler O'Neill + Partners LP global exchange and brokerage conference.
Mr. Moore's comments come at an interesting time. At least two high-profile independent broker-dealers are up for sale right now: Securities America Inc., which has 1,800 representatives, and Investors Capital Corp., which has 450. LPL has been mentioned as a potential suitor for both those firms.
Mr. Moore did not name specific firms in his comments but acknowledged that there has been an increase in discussions among broker-dealers about potential deals.
He was clear, however, that LPL currently has less interest in buying those types of B-Ds — which he dubbed “consolidation” plays — than in acquiring niche firms to expand its platform. He mentioned LPL's acquisition last year of National Retirement Partners Inc., a broker-dealer with 206 reps that focused on retirement plans, as a more likely type of acquisition for the firm.
Still, LPL has a history of pulling off blockbuster acquisitions of independent broker-dealers. In 2007, after months of on-and-off negotiations, LPL acquired three broker-dealers from Pacific Life Insurance Co. for $120.5 million. The three firms: Mutual Service Corp., Associated Financial Group Inc. and Waterstone Financial Group Inc.
The trio were home to 1,750 reps. That's roughly the amount currently affiliated with Securities America.
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