LPL to acquire Atria Wealth Solutions for $805M plus earn-outs

In its largest acquisition in seven years, LPL Financial secured an agreement to purchase Atria Wealth Solutions and its 2,400 financial advisors with $100 billion in client assets.

LPL will pay $805 million upfront plus additional "earn-outs" of up to $230 million, depending on the percentage of advisors retained by the firm through the expected close of the deal in the third quarter and a conversion period stretching through the third quarter of next year, according to a Feb. 13 investor presentation about the announcement. After expected onboarding and integration costs between $300 million and $350 million, LPL is planning for expenses between $1.105 billion and $1.385 billion and additional earnings of $140 million per year from the deal.

Atria is a New York-based holding company that has acquired seven brokerages since its launch in 2017 with backing from private equity investor Lee Equity Partners. Two of its brokerages work with about 150 bank and credit union-based investment programs — CUSO Financial Services and Sorrento Pacific Financial — and five service independent advisors: Cadaret Grant, NEXT Financial Group, SCF Securities, Western International Securities and Grove Point Financial. In 2022, Atria generated $736.3 million in revenue as the No. 13 firm on Financial Planning's annual IBD Elite ranking of the largest independent brokerages.

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"LPL shares our fundamental belief of putting advisors at the center of everything we do," Atria Wealth CEO Doug Ketterer said in a statement. "I'm excited for the opportunity that our financial advisors and institutions will have to leverage LPL's breadth of services, vast resources and unparalleled value proposition. There is no question that LPL represents the best opportunity for a financial professional, bank or credit union to grow their practice or investment program."

After the close of the deal, LPL will operate Atria as a standalone company for the remainder of the year before consolidating the seven brokerages together and moving the advisors and assets to LPL. Brokerage accounts comprise roughly 80% of Atria's assets, with the rest in advisory holdings. Including all of the earn-out payments and onboarding costs, LPL is paying a multiple of 7.9 times Atria's annual earnings, the investor presentation shows.

"Atria has built a great community of advisors and institutions, led by their client-centered culture," Dan Arnold, the CEO of LPL, said in a statement. "We look forward to welcoming their advisors and institutions to the LPL family, and to helping them optimize their success by providing the capabilities, technology and services to differentiate and win in the marketplace and run thriving businesses."

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The deal marked LPL's biggest purchase since the firm acquired National Planning Holdings and its four brokerages in 2017. The firm also purchased another large midsize firm, Waddell & Reed, in 2021. LPL has been on a recruiting tear over the past several years alongside making some smaller acquisitions such as Crown Capital Securities and Financial Resources Group Investment Services. Last year, the firm's headcount of advisors soared by 1,385, or 7%, year over year to a record 22,660.

It and the other largest firms in the independent brokerage channel have been rolling up their biggest midsize rivals at an accelerated pace in recent months. The Atria announcement followed Osaic's deal in December to acquire Lincoln Financial Group's wealth management business for $700 million and Cetera Financial Group's purchases of Avantax for $1.2 billion and the wealth and trust units of Securian Financial for an undisclosed sum earlier in 2023.